Iceland Set to Present Bill to Wipe Out Personal Debt to Relieve Turmoil

[Warren Stupidity]

Source: Bloomberg

Iceland’s government will this week present a bill allowing debtors to walk away from obligations that exceed asset values and to nullify personal bankruptcies after four years, Internal Affairs Minister Ogmundur Jonasson said.

“All Icelanders can see that our society is currently in turmoil,” Jonasson said in an interview in Reykjavik. “We’re therefore required to sit down at the table and offer solutions; I don’t anticipate that the people running financial institutions will disagree.”


Read more: http://www.bloomberg.com/news/2010-10-13/iceland-to-present-bill-to-wipe-out-personal-debt-minister-jonasson-says.html

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Some people have democratic republics where the people are actually represented and in charge of the nation.

[Angry Dragon]

1. They must live in a different universe

[kgnu_fan]

7. I just visited there. They have a different moral compass.

[yurbud]

16. as opposed to our pols non-existent one

[Davis_X_Machina]

2. Seisachtheia

Σεισαχθεια, the shaking off of debts. Old Greek idea.

[Bluenorthwest]

9. Also in the Old Testament in the form of

Jubilee years, cyclical debt cancellation.

[aquart]

14. Because no man should be so rich he has nothing left to buy but his government.

[glinda]

17. Seisachteia us here!!!!!!!!!!!!!!

[Davis_X_Machina]

20. It's interesting to note....

...that Solon considered that an absolute upper limit on wealth, including that acquired through marriage or inheritance, would in the long run make a second Seisachtheia unnecessary.

[Enrique]

3. the banks should have bought the government there

like they bought it here, then this never would have a chance.

[BolivarianHero]

6. The banks ran Iceland for years...

It turned into a fiscal clusterfuck and the electorate responded by wiping the neoliberal cobwebs from their eyes and sweeping Geir Haarde's cronies out of office. Now they have leaders who respect their heritage and their constituents enough that they use Icelandic rather than Anglicized names.

[Land Shark]

4. Once upon a time, Congress found debt {collection, esp...) destroys families, etc.

It's part of the congressional findings for the Fair Debt Collection Practices Act, and it's fairly strong language. Of course, that law doesn't provide for debt relief.

On the bankruptcy side and debt relief side, most recently bankruptcy "reform" was based heavily on a talking point, even from my Dem Congressman, that "people should pay their debts." Of course they should - but this point is absurd in the specific context where that debt has become overwhelming and unsustainable. (Chapter 7 'fresh start' bankruptcy made much harder to get in that legislation of 5 - 10 years ago)

[Ozymanithrax]

5. The debt doesn't just go away. At the end of the article...

HFF Director Asta H. Bragadottir said the mortgage lender isn’t able to withstand a flat reduction of all its home loans, in an interview today. If it is forced to write down the debt, the government will need to cover the loss or the country’s pension funds, which hold most of the bonds backing the debt, would need to agree to take the loss.

Debt will be paid for with a massive loss to peoples pensions.

[Land Shark]

8. Very important detail. sounds like a game changer that needs further study here... nt

[dixiegrrrrl]

10. Pension funds = bond dept is same here.

But We the people, via the semi-governmental Fannie Mae and Freddie Mac, now own something like 80% of the
mortgage bonds, which our government traded good money to the banks for.
Said bonds are now being considered very problematic because the lack of legal paperwork which should have been included in the various bond trusts.
Why do I have a feeling that even tho Freddie and Fannie and the housing market and homeowners will all be trashed in this mess, that the banks will somehow manage to walk away in one piece?
Worse that can happen to the banks is they declare bankruptcy, trash their investors and depositors, forcing FDIC to bail them out, then they re-emerge a few weeks later as a new bank, just like GMC traded bad debt for new organization earlier.

[Warren Stupidity]

12. "a massive loss to peoples pensions" - your invention.

There is no indication that pensions will be cut, simply that the government will not let the banks (those that remain) shoulder the burden unaided, and that the pension funds are one possible source of assets to help get through this crisis.

The article also notes that Iceland will ignore the IMF banksters in order to rescue its people from unsustainable debt burdens. Unlike this country, financial institutions and the people of Iceland will both have their losses socialized.

[Ozymanithrax]

21. That was a quote from the article...

I did not invent the notion of paying for it with peoples pensions. Read to the end of the article you posted before you acuse someone of making shit up. otherwise you are making shit up.

[Warren Stupidity]

22. I quoted the part you invented.

here it is again: "Debt will be paid for with a massive loss to peoples pensions."

You made that up. Nobody in the article said any such thing. It is your opinion that the pensions of Icelanders will be affected.

[muriel_volestrangler]

25. Well, it says pensions, or the general taxpayer

and so there's not much difference. One of those two groups is going to pick up the bill.

[Ozymanithrax]

29. But the bill will still be paid.

Nothing is free. Should a government decide to erase debt, then the taxpayers should take that debt onto themselves and not pass it on to some convenient group.

[Ozymanithrax]

28. I comment on the quote that said it would cause losses to peoples pensions...

Clearly, you did not read nor think about the article you quoted.

[villager]

11. I wonder what it's like to live in a democracy?

:shrug:

[bowens43]

19. Democracy is.....

two wolves and a lamb voting on what to have for lunch.

B. Franklin

:think:

[Democrats_win]

13. This should be job ONE for Democrats in America.

Of course they haven't even ended bush's wars yet so I wouldn't hold my breath.

[billlll]

15. WOW. Need that here

Any here calling for it?

[glinda]

18. Yes! Or roll back house loans to reasonable value to not loose investments as well as

dump the student loan debt from those who suffered abuses. I can think of lots of ways to get close to what they just did!

[Joanne98]

23. AWESOME!

[cbdo2007]

24. Cool...I should start racking up as much debt as possible just in case they do that here!

[kgnu_fan]

26. Different value ... that makes difference

[glitch]

27. Go for it.

Your debt will be disallowed, as it would in bankruptcy (it's called fraud).

[Blue_Tires]

30. Wow...I'd LOVE to see Wall Street's reaction to this news...

Since they have done nothing but blame the victims they just raped....

[Odin2005]

31. K&R