I agree with scott on most things but he only looks at what happens not how it happend. Iceland acctually said (around 2001 I would have too look) that they wi

I agree with scott on most things but he only looks at what happens not how it happend. Iceland acctually said (around 2001 I would have too look) that they will bailout there banks unlimted. They acctually tried to bail out there banks but faild, because knowbody was dumb enougth do currency swaps with them. They would have been hit so hard if they would have made that garantee (there banks where so badly overleveriged its unbelivable). The inflation they produced whas just because they tried to bail out with krona, it was not smart NGDP targeting that Scott would want. They did good by accident but we can learn from it anyway. What Im not sure about is if the default of the country itself was necessey if they would have helped the banks and other special intresst.