Of course. They’re not doing it for free though. Is your point that this is win-win? That the pension funds get a stable, government-backed source of income and that the government get their hospital without having to borrow the money to pay for it upfront?

I suppose the question is should the government be borrowing money from secondary (and presumably more expensive) sources when it can’t borrow the money to self-finance elsewhere?

“Do you know why the new hospital is being built?”

Because the hospital was not built in the boom years :)

From this document
http://www.haskolasjukrahus.is/nyrlandspitali/upload/files/kynningarfundir/21.april_2009/landspitali_report_03_04_09_(2).pdf

Hospitals are regarded as outdated and inefficient due to being located in different areas. Overall the hospital system as it exists does not fit in with present requirements and future demands.

So chop out that sentence:

But, if it is, it is surely misplaced. [snip I was wrong :) snip ]. Government spending is unsustainable; as I see it, that’s part of the reason for the IMF loan – to spread the pain of the adjustment out over time rather take the hit now. But the adjustment still needs to be made.

Do you know why the new hospital is being built?

Rather It is a point that you can’t contradict because you would not be able yo find facts to support your nonsense claim :)

“So let’s just agree that the Icelandic government’s revenues have been inflated over the past 5-10 and that their future revenues are going to be much lower.”

State revenues have increased steadily in the last 5 years up to 2008.
Contrary to your claims, the brunt of Iceland’s health care facilities have been gradually built up over decades.
Before unrestricted money supply created the bubble, health care standards were very good.

Where did you get that from?
Were not the the nuts and bolts of the health care system in place long before the bubble provided extra income for the State?

A fair point , and one that I can’t contradict because I’m not willing to review the Icelandic healthcare system over, say, the past 20 years.

So let’s just agree that the Icelandic government’s revenues have been inflated over the past 5-10 and that their future revenues are going to be much lower.

Where did you get that from?
Were not the the nuts and bolts of the health care system in place long before the bubble provided extra income for the State?