That strategy held banks responsible and turned the government into an owner. When distressed assets were sold, the profits flowed to taxpayers, and the government was able to recoup more money later by selling its shares in the companies as well. Sweden ended up spending 4% of its GDP on bailing out banks, equal to about $18.3 billion. The final cost to the country was actually 2% of its GDP.

A few American industry experts have proposed that the United States government extract equity from banks as a price for their rescue, like Sweden did. But it does not seem to be under serious consideration yet in the Bush administration or Congress.

Will our country be a success story or a cautionary tale?

Related ETFs:

  • iShares MSCI Sweden (EWD), down 21.4% year-to-date
  • CurrencyShares Swedish Krona Trust (FXS), down 1.5% year-to-date