We can look to Iceland for an example of how to handle the next crisis. In 2008, they jailed the bankers, let the banks fail without taking on their debt and put controls in place to protect the economy.
There are at least two good reasons why inflation remains well below targets even as the economy is improving and despite years of economic stimulus.
Since 2008, the Federal Reserve has more or less printed over $3.2 trillion in three rounds of quantitative easing. That’s now tapering off to zero, but many have speculated that all this printing must result in inflation simply because it puts more U.S. dollars out there
Prime Minister Shinzo Abe’s economic stimulus policies have put GDP growth numbers far higher than forecasts predicted.
In an era of dogmatic economic austerity, when elected officials in Europe and the U.S. are purging jobs and slashing public sector spending, Japan is trying a different approach to remedy economic recession by increasing spending on social programs to help the public and put people back to work.
And unlike austerity,
