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After the Iceland bank, Icesave, went under in 2008, the governments of Britain and the Netherlands reimbursed depositors in their respective countries the amount insured under European Economic Area regulations.

The British and Netherlands governments then wanted the government of Iceland to reimburse them over $5 billion for this expense. This would have cost Iceland's taxpayers an estimated $135 a month for eight years, or a quarter of the monthly salary of a four-member family in Iceland.

CNBC's website is reporting that on Saturday, voters in Iceland voted 93 percent to 1.8 percent (the rest of the ballots were spoiled or blank) to reject a plan worked out by the governments of the Netherlands, Britain and Iceland to repay Britain and the Netherlands.

Good for Icelandic voters.

For decades western governments and bankers have used a combination of paper currency, deliberate inflation, fractional reserve banking, low reserve requirements, cheap credit and government guarantees to keep the financial system afloat.

This dangerous mix has enabled banks to lend foolishly and governments to borrow recklessly. Politicians know that if the system becomes unstable they can compel the taxpayer to bailout the system.

So it is encouraging to read that Iceland's taxpayers aren't as gullible as bankers and politicians once believed.

Icesave's collapse, while terrible for depositors, is a natural outworking of an inherently unstable banking system. Bank failures and instability are to be expected. For too long depositors and banks have been protected by government guarantees. The financial system would have been much better served had the governments of Britain and the Netherlands not bailed out their citizens. It would have been a very costly and painful decision, but depositors would learn a very important lesson: The banking system is unstable and not to be trusted.

After Saturday's vote, Iceland's government has decided to renegotiate the repayment deal. Politicians want to negotiate a plan that is not as painful or as costly. The plan will probably go back to the voters approval or disapproval. Let's hope that voters keep rejecting any future repayment plans.

Franklin Sanders addressed a gathering Friday February 27, 2010.  It is entitled Where Are the Adults?  Franklin Sanders presents three possible outcomes to the financial crisis that is affecting the United States: the least likely outcome, the most likely outcome and the best possible outcome.

If the people of the United States are to reclaim their liberty and freedom, much hard work will have to be done.  People will have to start thinking outside of the current paradigm.  That won't be easy.  Those muscles have atrophied.

Hopefully you will find the address of interest and profitable.

I am so tired of conservatives.

Conservatives have built up an industry to expose and discuss and decry all conspiracies against liberty and all problems but never to take any action that might solve them, because if the problems were solved, no one would need the conservative industry.

In the past few years this feckless conservatism has taken the road of radio talk show hosts and TV talking heads who, not much to anybody's surprise, talk. They are, after all, paid to talk, not act. They talk, they stir people up, they draw outrage, but they never do anything. If anyone threatens actually to do something, they ridicule and blacken him.

A few days ago I got an e-mail from someone urging me to read it because Obama is awful and “we are in danger of losing all our liberty.” Wow, I wondered, where have you been for the last 80 years? What were you watching during the years of Bush 2, Clinton, etc., etc.?

Where are the adults?
Where are the serious people?

Where are the people who understand that the current issue we face is nothing less than self-government and freedom itself, and no amount of superficial tinkering and fiddling will solve the problem, only serious and fundamental changes. The time for talk is past. The time for action has arrived. Nothing else will do but to re-assert our ancient rights, and that must begin with the states and the 10th Amendment.

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Ron Holland has written a very interesting and timely article about Swiss political governance, currency competition and taxation. Of particular interest was how the Swiss cantons use tax competition to keep their taxes low, their government small and their politicians honest.

In contrast to the United States, the largest percentage of taxes are collected at the level of the canton. The national Swiss government has a very modest tax rate, comparable to state tax rates found in the United States. In the US, wherever a corporation locates, the federal corporate income tax follows. States are able to offer very little in terms of tax incentives.

Because there is so much local control over taxes in the cantons, "This allows different cantons and even localities in individual cantons to dramatically compete for residents, corporations, businesses and even retirees." "Retirees from outside Switzerland can even create a type of low-bid competition for a set amount or percentage tax rate between cantons."

Ron Holland observes that this is anathema to the bureaucrats in the European Union. EU politicians want a system similar to that found in the US where national governments don't have to compete on the basis of tax competition. They want a system of tax harmonisation whereby corporate tax rates are essentially the same from country to country. Politicians have already taken a dramatic step towards harmonisation by insisting that every EU member state implement a VAT tax of at least 15 percent.

There are many lessons to be learned from the Swiss. They have been able to rule over their politicians and keep government limited for several hundred years. As the financial crisis worsens and the dollar weakens, there will be less incentive for the states that created the US federal government to continue in that union. When that day comes, the Swiss governance model will be worth emulating.

The Coalition for Tax Competition has sent a letter to the members of the US Senate and US House of Representatives.  The letter warns of the anti-growth components of Senator Reid's “jobs bill” (S.A. 3310 to H.R. 2847).

Senator Reid's bill will impose a thirty percent withholding tax on the investments of foreign financial institutions unless they agree to report the accounts of every American account holder.

Obviously legislation like this makes it more expensive for companies to do business in the United States and will divert global capital to other countries around the world.

The Coalition for Tax Competition correctly points out that by imposing US laws on companies acting outside the United States, other countries will respond in similar manner.

"This bill is a threat to fiscal sovereignty, both in the United States and around the world.  Governments should have no right to impose laws and regulations outside their borders, and this effort to impose bad American policy on foreign banks will invite bad consequences and open the door for foreign governments to do the same to us." — Daniel Mitchell

The US Senate has passed legislation that directly threatens the fiscal sovereignty and financial privacy.of foreign companies and invites meddling by other nations into the affairs of US business interests.

This legislation is unwise and needs to be opposed.