I had previously (here and here) pointed to Iceland's approach to their debt crisis as an example of what the Austrian School of Economics (see Mises.org) recommends: Do nothing.
In Iceland, the government let insolvent banks fail, people lost jobs, there was a liquidation of bad investments, ... BUT then there was a rapid recovery.
Contrast that with the European and American approach: keep sapping the economic strength (i.e. looting) of the productive sector of their constituents, and move that money around, print money, obfuscate, etc.
Kick the can down the road, let it be someone else's problem.
The OECD has come very close to predicting a depression for Europe unless EU leaders conjure up a lender-of-last resort very quickly, and somehow manage to make the world believe that the EFSF bail-out fund really exists.
Even if disaster is avoided, the eurozone growth forecast is dreadful. Italy, Portugal, Greece will all contract through 2012, while Spain, France, Netherlands, and Germany will bounce along the bottom.
Unemployment will reach 18.5pc in Greece, 22.9pc in Spain, 14.1pc in Ireland, 13.8pc in Portugal.
Yet Iceland stands out, with 2.4pc growth and unemployment tumbling to 6.1. Well, well.
Ambrose Evans Pritchard at the Telegraph