Since the end of 2008, Iceland’s banks have forgiven loans equivalent to 13 percent of the gross domestic product, easing the debt burdens of more than a quarter of the population.  According to Laes Christensen, Chief emerging markets economics at Danske Bank A/S in Copenhagen “Iceland followed the textbook example of what is required in a crisis.  Any economist would agree with that.”

I will start off the paper discussing Iceland’s economy and what lead to their economic meltdown and how large a role forgiveness of debt played in helping them to recover.  The second part of the paper I will discuss what America did in order to recover from the financial crisis and what experts said about forgiveness of debt, both good and bad.  I will also add my own opinion and tell who I agree with and why.

I will conclude my paper with how President Franklin Delano Roosevelt forgave debt to help America recover from the depression in the 1920’s and what financial experts said about his decision to do so.