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Originally posted by Sikander
We need to simply tell our banks that they are on their own in this regard. Lend to Chavez and reap the whirlwind.
We need to simply tell our banks that they are on their own in this regard. Lend to Chavez and reap the whirlwind.
The rule of thumb for declaring a debt odeous or not is whether or not the loan was used to improve the nation. So, in the example of Zaire/The DRC, the loans used to build the bridge would not be forgivable, but loans that were looted would be. The bridge is a capital improvement to the nation, and it is not the loan holder's fault that the dictator didn't keep up repairs. On the otherhand, loans used, for example, to build up Iraq's military could be declared odeous, and Iraq could probably get away with not paying them. The tricky part will come in showing whether the money was actually used for the project, or whether it was used to allow the dictator to syphon money away elsewhere.
Now, here's the wrench in Shi's machine. What do we do about loans that originated with dictatorships twenty or thirty years ago, that the debtor has renegotiated multiple times, because it was always told it could not have its debt forgiven. So, (pulling example out of ass), Argentina takes out a 5 billion dollar loan to pay for it's war against Great Britain. After the fall of the dictatorship, the loan gets renegotiated, to six billion, because the payments were extended over another decade (and made smaller). Over twenty years of renegotiating that debt (because the economy's been falling apart much of the time), it now owes twenty billion on that loan. Should Argentina still have to pay back that money?
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