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Iceland is an example of an economy that is small enough to fail. Alot of governements and companies in Europe lost a lot of money in that move, but not enough
by tlarkworthy 14y ago
Iceland is an example of an economy that is small enough to fail. Alot of governements and companies in Europe lost a lot of money in that move, but not enough to be catastrophic. If a bigger economy defaulted, then we would be f*ed. China for one would not take a writedown of US debt for example.
- nickik 14y ago> we would be f*ed Who is we. I dont think that if a big banks fails everybody in that country is fucked. Fucked are the people working there and the people who invested in that companys (this includes people with debit accounts since that not really diffrent from an investment). The idea that banks are 'to big to fail' has largly been shown to be retoric. Analysis after every bank failure since 50 years has shown that actual failure would not have been as bad as predicited.
- tlarkworthy 14y agoDunno, people are wound up in investment without knowing about it. Kiss goodbye to your pension. Kiss goodbye to infrastructure and schools in your local area (http://news.bbc.co.uk/1/hi/uk_politics/7659783.stm http://news.bbc.co.uk/1/hi/uk_politics/7659783.stm)
- nickik 14y agoSo most of the things goverment forced me to have? Maybe that is true in some cases but infrastructure does not siappear, it may be sold of because the owner went out of buissness. In a market for education a new school would open, in a goverment system the school would not go out of buissness because the goverment is not out of money. Maybe you pension is gone, well you should not invest in a pention fund that makes bad investments. We can not protect everybody all the time, the hole point of having a social system is that some people sometimes run out of money.