We hear on the MSM how Greece’s debt problem needs to be solved by lending them more money: issuing more new debt to pay the old debts. Brilliant. Use a new credit card to pay off some of the old credit cards.
What we never hear about is Iceland.
Iceland’s finance minister has announced a 39 per cent tax on investors looking to take their money overseas.
Iceland also allowed bankers to be prosecuted as criminals – in contrast to the US and Europe, where banks were fined, but chief executives escaped punishment.
The chief executive, chairman, Luxembourg ceo and second largest shareholder of Kaupthing, an Icelandic bank that collapsed, were sentenced in February to between four and five years in prison for market manipulation.
“Why should we have a part of our society that is not being policed or without responsibility?” said special prosecutor Olafur Hauksson at the time. “It is dangerous that someone is too big to investigate – it gives a sense there is a safe haven.”
Bailing on bail out
While the UK government nationalised Lloyds and RBS with tax-payers’ money and the US government bought stakes in its key banks, Iceland adopted a different approach. It said it would shore up domestic bank accounts. Everyone else was left to fight over the remaining cash.
Iceland’s debts are getting more manageable
It also imposed capital controls restricting what ordinary people could do with their money– a measure some saw as a violation of free market economics.
The plan worked. Iceland took a huge financial hit, just like every other country caught in the crisis.
Recovery ‘without compromising on welfare model’
This year the International Monetary Fund declared that Iceland had achieved economic recovery ‘without compromising its welfare model’ of universal healthcare and education.
Other measures of progress like the country’s unemployment rate, compare just as well with countries like the US.
Rather than maintaining the value of the krona artificially, Iceland chose to accept inflation.
Iceland’s unemployment rate compares well
This pushed prices higher at home but helped exports abroad – in contrast to many countries in the EU, which are now fighting deflation, or prices that keep decreasing year on year.
This year, Iceland will become the first European country that hit crisis in 2008 to beat its pre-crisis peak of economic output.
With the reduction of capital controls – tempered by the 39 per cent tax – it continues to make progress.
“Today is a milestone, a very happy milestone,” Iceland’s finance minister Bjarni Benediktsson told the Guardian when he announced the tax.
• source: belfast telegraph.co.uk
Criminal Financial System
In his Weekly News Wrap on May 22, 2015 Greg Hunter of USA Watchdog covers the Bank Criminality. A MUST WATCH.
Banks agree to pay fines for CRIMINAL CHARGES such as:
- market rigging
- interest rate rigging
and merely pay a fine which happens to be paid by the shareholders while the perpetrators are free to collect bigger bonuses. The fines are a small fraction of the massive profits made from fraudulent practices.
NO ONE GOES TO JAIL
…….yet the US Attorney General seeks to serve justice to those World Soccer Scoundrels.
• source: usaWatchdog.com
Another good interview from a few months back in case you’re not up to speed.
7 thoughts on “IMF data shows Iceland’s economy recovered after it imprisoned bankers and let banks go bust – instead of bailing them out”
Reblogged this on An Outsider's Sojourn II and commented:
Why hasn’t the U.S. Corporation taken the same action as Iceland?
From your question it’s apparent you ARE more up to speed than the average guy on the street. Thanks for the Reblog. Hopefully we’ll get more people talking!
No problem, glad to spread the message!
Let’s hope so. We just need to keep trying!
I think there are more people than we realize waking up to these issues. It’s just the old “silent majority” scenario right now, methinks;-)
I’d like to think so and at times it seems that there are. At most times though, it does seem that most are clueless. The water is heating up so slowly and so gradually that the frogs do not realize they are being boiled. People are so distracted……………
I hear you, believe me.
There are days when I wish I didn’t know what was happening (to the extent that I do), and I’m more than certain you can relate!
great post 🙂
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