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View Diary: Iceland Solves Banking Crisis by Indicting Bankers, Forcing Mortgage Relief (191 comments)

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  •  Thanks for the clarification (4+ / 0-)

    People equate Greece and Iceland and they are completely not the same thing.

    Iceland's problem was that its privately held banks could not meet their debt service and they collapsed. This is a comparatively "easy" problem to solve because Iceland can just say "those were private debts, you guys are SOL, sorry." Not that this won't hurt Iceland a lot and in practice Iceland has had to agree to various demands, but it's manageable.

    In Greece, the public sector is the insolvent one. That is a much harder thing to fix because if their public sector defaults then their public deficits vanish instantly! (which all sectors of Greek society depend on, especially the poor). Your economy implodes overnight.

    If your public debt gets too high (and your deficits stay high), you are virtually guaranteed to have an economic implosion. There is almost no other possible outcome.

    (-5.50,-6.67): Left Libertarian
    Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

    by Sparhawk on Fri Feb 24, 2012 at 09:24:44 AM PST

    [ Parent ]

    •  And in the US? (5+ / 0-)
      Recommended by:
      YucatanMan, elwior, Spoc42, JesseCW, Eric Blair

      The private banks caused the crash.  That's exactly why we need to go the Iceland route.  

      Greece has a different set of problems which austerity isn't going to fix.  

      •  Saying that privately held US banks caused the US (1+ / 0-)
        Recommended by:

        crash is not the same thing as saying private Iceland banks caused the Iceland financial crash. The complexity of what was going on in the two cases isn't really conducive to discussion on a blog. The situations are substantially different. For one thing, if the Iceland banks collapse, the world deals with it and moves on. If the US banks collapse, the world economy collapses.

        Iceland was saved by IMF. IMF can't save the US. Iceland's banking system was significantly downsized. If the US banking system gets significantly downsized, standards of living are impacted worldwide. Iceland was able to restore confidence by applying to join the EU. No such avenue for restoring confidence exists in the US, aside from using our military to take someone's natural resources....

        •  Standards of living are being impacted (1+ / 0-)
          Recommended by:

          worldwide anyway, but the rich are keeping their money while the poor are being stomped on, worldwide, TODAY.

          "Restore confidence in the USA?"   Every other nation will have similar issues.  What other nation is prepared to become a global currency standard overnight?

          When the US Recession was headed down everyone was worried the Euro would become the standard.  Fat laugh that was.  Look where the Euro is today, just a couple years later.

          Restore confidence in the USA?  S&P downgraded US Debt and bond rates FELL.... because no one bought their BS.

          What a Police State Looks Like: "On one side: soft human flesh, unprotected human skulls, cardboard signs, slogans they chant, armed with belief in 1st Amendment rights. On the other: helmets, body armor, guns, batons, chemical weapons." -- JanetRhodes

          by YucatanMan on Fri Feb 24, 2012 at 10:41:38 PM PST

          [ Parent ]

        •  Right. Based on history, either USA into WW2 (0+ / 0-)

          or the other actors previously, the military card is the one that will be played.  See a strong counterweight to it?

          Unless one grows really fast, expect the "default" option.

          This currently under construction..

          by BeeDeeS on Tue Feb 28, 2012 at 07:10:42 AM PST

          [ Parent ]

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