In the US internet bandwidth is in the same category as health care -- it's a luxury you have to pay extra for.

So what happens if you start using your internet connection at full capacity 24/7, and so do all the other customers of your ISP?

On the kind of fast connections you have over there, you could easily run up hundreds or even thousands of dollars worth of bandwidth charges for your ISP. Will they just operate at a loss, or will the government step in and pay the bandwidth costs, or will they throttle your speed down?

Not necessarily. If everyone tried to use the connection at full capacity, they wouldn't succeed since the backbone and international connections are bottlenecks at a far lower capacity than the collective theoretical bandwidth of all local users. So if a million Swedes tried to download from YouTube at 10Mbps each, you can be sure there isn't a 10Tbps pipe to deal with that, and so every user would end up with slow, sluggish service. Just unmetered.

I assume you can be throttled if you use too much, and in that weird scenario, I assume the ISP would throttle everyone to balance costs.

Then again, most of our ISPs are tier1 or tier2 networks, so I assume they don't worry too much about peering costs.

There wouldn't even need to be any explicit throttling - when a site gets slashdotted or whatever everyone trying to access it slows to a crawl, but it's not because individual user's ISPs are throttling them. An ISP that was saturating its outbound links might drop packets according to some algorithm to ensure "fairness" rather than at random, but that's still not throttling, that's "our network is too congested to keep up with demand".