In early January, Iceland's president vetoed legislation that would cost everybody in Iceland $16,000 on average—probably twice that if you just count taxpayers—to make British and Dutch governments whole (after they bailed out depositors in collapsed Icelandic banks). It would force the people of Iceland to pay for banking collapses. Yesterday the same resolution was put to public vote where it lost by a near unanimous 98% margin.
If $16,000 seems like a shocking number, Americans owe more than $90,000 per taxpayer on our national debt. In America, such legislation never would have gotten to the voters because Congress would have gladly passed it and the president would have gladly signed it. Imagine if the TARP were put to public vote, or the Obama Stimulus? Each of these would have easily been defeated, as would the current bill for health care "reform." Personally, I think any legislation big enough to cost taxpayers that kind of money should be put to public vote.
This probably is not totally over but I don't know how much recourse Britain and the Netherlands have. The Iceland government will have serious credit rating problems over the coming years, and probably Great Britain has enough influence that there will be any number of diplomatic consequences for Iceland. But Icelanders will reap the benefit of a government now forced to live within its means, which creates a healthier society for all.
1. Iceland's Message: Don't Bail Them Out.
2. Iceland's GDP rises 3.3% ahead of referendum.