When tiny little Iceland's banks went bust a few years back the world financial community demanded repayment of private debts from the public purse. But they didn't get a fuckin' dime. What did happen is nothing short of amazing.
"Elections were called and in April 2009," says Deena Stryker @ The Daily Kos, "resulting in a left-wing coalition [government] which condemned the neoliberal economic system, but immediately gave in to its demands that Iceland pay off a total of three and a half million Euros. This required each Icelandic citizen to pay 100 Euros a month (or about $130) for fifteen years, at 5.5% interest, to pay off a debt incurred by private parties vis a vis other private parties. It was the straw that broke the reindeer’s back."
A pretty typical outcome for a European liberal democracy, so far. But the Icelanders are a plucky bunch, and they demanded and got a referendum as to whether or not they'd pay all that private debt plus interest back themselves through their taxes .
"What happened next was extraordinary. The belief that citizens had to pay for the mistakes of a financial monopoly, that an entire nation must be taxed to pay off private debts was shattered, transforming the relationship between citizens and their political institutions and eventually driving Iceland’s leaders to the side of their constituents. The Head of State, Olafur Ragnar Grimsson, refused to ratify the law that would have made Iceland’s citizens responsible for its bankers’ debts.."
The mice have finally roared. Good for them.