Can't the US just buy the oil from Iraq and the hell with France and Russia and UN?

[Ned]

Originally posted by MichaeltheGreat
So in other words, the US, as the invading and occupying party, should have first call on Iraq's oil revenues, and other countries with pre-existing commercial obligations can go hang, as can the Kuwaitis, who were invaded and plundered 12 years before?

If the Iraqis are paying their foreign debt, then obviously, we are not. And if we, as an occupying power, are contracting reconstruction to American and American-favored countries, then we get to pay for it. Don't like it? Then don't do it and get out. Simple, really. After we fix, at our cost, what infrastructure, etc. we destroyed, pursuant to our obligations as an occupying power. If it's expensive, then maybe the American people will think twice before jacking off to the notion of invading other countries.

We caused very little damage. Further, we have no legal obligation to pay for its reconstruction. All we have an obligation to do is maintain order, provide food other essentials and provide for a new Iraqi government in due course.

We could, suspect, let Iraq lie in ruins as did the USSR when it occuppied Germany. But instead we are going forward with reconstruction out of our own pocketbook until a new Iraqi government is formed. At that time, they will take charge of reconstruction.

But, how are they going to pay for it? They simply cannot place a contract with a French firm and order the US to pay for it, can they? No, they have to pay for it themselves.

So, if all the oil money is gone to pay France, Russian, and Germany - the unholy alliance - and to pay Kuwait and Iran, there will be no money for reconstruction.

Now, this is where I think we get stuck. We are so f*cking kind and generous as a nation that I think we will pick up the tab for the French reconstruction contract.

[TCO]

Might not be a bad idea to limit investing in dictator-led bananalands. It is a form of moral hazard. Yes, this could get misused for trivial changes in government. But the current situation gets misused by sweetheart deals (with kickbacks and the like) with dictators.

I don't think there is an easy answer. It is not a trivial or settled issue. It has been discussed since the 1898 war, when we argued against Cuba having to honor certain debts. There was born the concept of "odious debt". I'm not really arguing a position so much as raising a flag to say that this is not a settled issue.

Also, the terms of the debt do not prevent Iraq from selling oil regardless. They are not in recievership. (no state ever is.) So the attempt to hold them over the barrel in terms of current sales allowance versus debt satisfaction can be resisted.

[TCO]

Originally posted by GePap


Oh, so you support the US forgiving every dime any state owes us if that money was lent to them under a dictatorship? I can tell you there are plenty of states in Asia, Latin America and Africa who would love such a ruling! So, do you approve of that idea?

Maybe all these countries (Mexico, Egypt, Cuba, etc.) should have to hand over nationalized thefts of property as well. Well...they get to get away with that...

[GePap]

States have the right to nationalize, they simply have to pay people something for the seazure close to amrket value at the time. And who is talking about recivership? The new Iraqi government will work out the schedule of payments when they are back in power. Simple enough.

But as I said ealier, if you want to change the way the world does business, do it with your money, not someone elses.

Ned:

But, how are they going to pay for it? They simply cannot place a contract with a French firm and order the US to pay for it, can they? No, they have to pay for it themselves.

So, if all the oil money is gone to pay France, Russian, and Germany - the unholy alliance - and to pay Kuwait and Iran, there will be no money for reconstruction.

Now, this is where I think we get stuck. We are so f*cking kind and generous as a nation that I think we will pick up the tab for the French reconstruction contract.

As I told GP, the parties to whom Iraq owes some finantial obligation will work out a schedule of payments: if all of Iraqs money was not going to debt relief under Saddam, why would it be so now?

There is also nothing unholy about France, Germany or Russia.

The US claism it wants to create a democratic Iraq that will be a model for the area. To do so we do have to spend billions upon billions. We can do far less, just pack up and leave..but don;t expect a democratic Iraq to be the result of such an action.

You Ned claim lofty, no, HEAVENLY MADATED!!! goals in Iraq and state anyone who did not share them SPAWNS OF EVIL!!!. Well, moral crusades cost lots of money, lots and lots of money. If you are unwilling to pay the costs of your moralistic crasading, don;t do it at all.

[TCO]

Originally posted by GePap
States have the right to nationalize, they simply have to pay people something for the seazure close to amrket value at the time. And who is talking about recivership? The new Iraqi government will work out the schedule of payments when they are back in power. Simple enough.

But as I said ealier, if you want to change the way the world does business, do it with your money, not someone elses.

Ned:

But, how are they going to pay for it? They simply cannot place a contract with a French firm and order the US to pay for it, can they? No, they have to pay for it themselves.

So, if all the oil money is gone to pay France, Russian, and Germany - the unholy alliance - and to pay Kuwait and Iran, there will be no money for reconstruction.

Now, this is where I think we get stuck. We are so f*cking kind and generous as a nation that I think we will pick up the tab for the French reconstruction contract.

As I told GP, the parties to whom Iraq owes some finantial obligation will work out a schedule of payments: if all of Iraqs money was not going to debt relief under Saddam, why would it be so now?

There is also nothing unholy about France, Germany or Russia.

The US claism it wants to create a democratic Iraq that will be a model for the area. To do so we do have to spend billions upon billions. We can do far less, just pack up and leave..but don;t expect a democratic Iraq to be the result of such an action.

You Ned claim lofty, no, HEAVENLY MADATED!!! goals in Iraq and state anyone who did not share them SPAWNS OF EVIL!!!. Well, moral crusades cost lots of money, lots and lots of money. If you are unwilling to pay the costs of your moralistic crasading, don;t do it at all.

1. Many nationalizations do not adequately compensate the people who lose their property. It is not generally about a transfer at market prices. It is about seizing the means of production.

2. What if iraq defaults on their debt? (They're never going to pay it all anyway. They weren't doing so when Saddam was in power.) They just have to deal with people being less-willing to loan to them in the future. But it might actually be a smart move.

3. As I said, the terms of the loans did not generally attach directly to oil revenues. So the creditors do not have any extra right to stop foreign trade. (They may choose to do so wrt sanctions and the like. But their grounds there are just the existing legal arrangments. None of the sanctions were put in place because of debt collection.)

[DanS]

It is not a trivial or settled issue.

Much of it is settled in this case, unfortunately. Russia is still paying Soviet debt through the Paris Club, and is therefore not likely to give Iraq the benefit of the doubt. I'm sure that they would think it fair to use their UNSC veto to help secure payment from Iraq.

As I understand it, Iraq owes about $26 billion in principle to Paris Club countries, about $8 billion of which is to Russia. Plus decades of interest.

Then you have reparations for the Iran and Gulf wars. I'm sure those go into the $ tens of billions.

GP, it's good to see you around!

[Ned]

GePap, actually, I was in favor of Gulf War II primarily as an exit strategy from the region. We had to get the matter of Saddam resolved one way or the other in order for us to pull out. Bush has promised a pullout. But I note that Clinton did too in Bosnia and Kosovo, but we are still there. I only hope that we get the new Iraqi government up and running ASAP and pull out completely.

[TCO]

Originally posted by DanS
It is not a trivial or settled issue.

Much of it is settled in this case, unfortunately. Russia is still paying Soviet debt through the Paris Club, and is therefore not likely to give Iraq the benefit of the doubt. I'm sure that they would think it fair to use their UNSC veto to help secure payment from Iraq.

As I understand it, Iraq owes about $26 billion in principle to Paris Club countries, about $8 billion of which is to Russia. Plus decades of interest.

Then you have reparations for the Iran and Gulf wars. I'm sure those go into the $ tens of billions.

GP, it's good to see you around!

I seem to remember the Sovs doing some defaults. No??

[DanS]

The Sovs? Do you mean Russia '98? If the former, then I don't recall.

[TCO]

Originally posted by DanS
The Sovs? Do you mean Russia '98? If the former, then I don't recall.

yeah. Russia 98.

[DanS]

Here's an interesting article on the subject.

http://www.fortune.com/fortune/articles/0,15114,448774,00.html

This will be a tough issue for John Taylor to work out in a satisfactory manner diplomatically. If he works it out well, then it would be very helpful in securing the Fed chairmanship, once Greenspan steps down.

yeah. Russia 98

They defaulted a lot, but ended up paying on most/all of it. But Iraq hasn't even been paying on most of the debt for decades.

[TCO]

I hope the renege on most of the debts. What will the creditor nations do? Invade? Countries have defaulted before.

If that means that people are less likely to lend to dictators, fine. We've eliminated some moral hazard. And wrt Iraq getting future loans, I don't think they'll have a huge problem. If anything they may find it easier to get loans once all the debt is off their balance sheet.

[TCO]

Originally posted by DanS
They defaulted a lot, but ended up paying on most/all of it.

Huh??

[Lancer]

I thought the US low interest loaned the billions to the 'new' Russia and they paid their loans due with it. Our way of supporting democracy there.

I recall this from a news program years and yeats ago. Stuck with me because I couldn't believe they were giving US taxpayer money to the Rooskies, just a wrong thing to do. Now look at how our new friends treat us, AT missiles taking out Abrams.

[DanS]

Huh??

They didn't make the payments when they were due. They defaulted. But they have since restarted payment on some loans, restructured others, etc. IIRC.