

Iceland forgives mortgage debt of its population - zotz
http://www.youtube.com/watch?v=uyxzg58JkYI

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paulhauggis
I sure wish I could get a mortgage for a house I obviously can't afford and
then not have to pay it back.

It doesn't teach the person getting the mortgage anything about how to
properly manage their money and not get in this sort of situation again.

They will just do it again in the future, but with something like credit card
debt. This is a huge disservice to their economy.

I also wonder who has to pay for this. If it's the bankers, then it's a scary
thing. It means the government pretty much has control over the
companies/banks there. If not, then it's coming out of the taxpayer's

~~~
kls
_They will just do it again in the future, but with something like credit card
debt. This is a huge disservice to their economy.

I also wonder who has to pay for this._

Actually Iceland's economy is doing pretty well they where the only country to
out of hand reject placing the private bank debt onto their tax payers as such
the banks folded. I think the mortgage forgiveness is an extension of that,
the banks folded due to them not being able to strap the debt to their public.
Iceland has held the banks accountable for there abuse of the laws, and there
are many cases in which Icelandic bankers where clearly in violation of
Icelandic law. Some of this forgiveness is an extension of that, e.g forgiving
fraudulent indexed loans and forgiving loans that where appraised by people
paid by the banks to give higer appraisals, this link has more info on the
subject than the video: [http://www.bloomberg.com/news/2012-02-20/icelandic-
anger-bri...](http://www.bloomberg.com/news/2012-02-20/icelandic-anger-brings-
record-debt-relief-in-best-crisis-recovery-story.html)

~~~
Lazare
_"...Iceland's economy is doing pretty well they where the only country to out
of hand reject placing the private bank debt onto their tax payers..."_

Sorta, but I think that's a little garbled. The big question is "should the
government guarantee the debts of private banks". The textbook/neoliberal
answer is "no, of course not, that would be insane". However, at the behest of
the EU, Ireland did exactly that - an unprecedented move which has worked out
pretty much exactly how everyone THOUGHT it would: badly.

Iceland, by contrast, went with the textbook answer (the Bloomberg story you
link to even says this explicitly) of telling the creditors of private banks
to get stuffed. They aren't the first nor yet the hundredth country to do
that, and they won't be the last. And it working out fairly well for them, all
things considered.

What's unusual here isn't how Iceland has behaved, but how _Ireland_ has
behaved. And it's there we should be looking to draw the real lessons about
what to do and - more importantly - _not_ do about future bank crises. (The
Irish bank debt guarantee may yet prove to be the single silliest decision in
the whole European debt crisis. Considering the competition, that's
impressive.)

