If the whole world were to magically come to a moral decision to cancel the debts in all 3rd world countries - what would the outcome be?
Bad for western countries? Good for them? Bad for bankers? Bad for citizens? Good? Good for 3rd world countries?
Pretty soon the US may become a 3rd world country.
The debt forgiven countries would learn the lesson that loans can turn into grants, that they can appeal to the charity of countries without regard to results and that they can take what is allegedly a second chance at recovery and turn it into a way of life.
The reason for alleged is because the U.S. Empire does not care about the welfare of other countries, only their loyalty.
I’ve recently become aware of the fact that Structural Adjustment Programs in 3rd world countries are actually hurting the countries more than they are helping them.
Regardless, I’m not too interested in the moral and ethical debate over canceling the debts, but rather what affect it would have on the lenders. Regardless of the reaction from the 3rd world country, I’m more interested in what affect it would have on the countries that loaned the money and lost it. Anyone have any insights?
Zero credit rating.
Many many banks would go out of business, after the collapse of the IMF and World Bank. It would be far more effective to start with dictatorial nations, and audit the system to find just how much money actually went to the people. Cancel any debts that did not.
Of course that will make the major banks jack up their rates on what they lend to other banks, probably causing unemployment in the 1st world. Either way,there’s only a fixed amount of work to be done, especially if it all must be profitable, so this is a balance that has to happen if we’re going to stop exploiting small nations to fill our great hungers.
What does this mean?
edited for clarity
Ok, but I still don’t get this “fixed amount of work to be done” bit.
Joe, you know… that regular mercantilist fallacy.
Yup, I know about it.
I’ve just been looking for someone to give me a convincing explination of it.
Scarcity, it’s a fact. Is there enough material for me to build one giant builiding everywhere in space? No.
Would it be profitable for me to build a bridge every 20feet accross a river?
etc
That is not a limited amount of work to be done. The amount of work to be done is the amount of work you can imagine you would like done.
This is why reading this website is useful. You can catch up with the rest of us. Rather than having to argue about things like, “hot air rises”.
Of some things, yes. Of hypotheticals and ideas, not really.
No. But would that be a profitible venture?
There are infinite combinations of unprofitible work to do. That’s not the issue.
The claim is that there is a finite amount of profitible work to do. If that were the case, people would cease to act, as all actions would be unprofitible.
Sorry to butt in here - I guess a more feasible option from the IMF and World bank would be to end all Structural Adjustment Programs.
They have even admitted it doesn’t help:
http://www.brettonwoodsproject.org/art-16300
In 2005 the G8 Cancelled a bunch of debt in 3rd world countries:
http://www.pbs.org/newshour/bb/africa/jan-june05/debt_6-13.html
I’m not aware of if or how that was actually carried out - but I guess it is possible for it to happen.
But you are all basically saying that if we cancelled all the debts - the entire banking system would crash?
(not that we won’t hit hyperinflation here anyway if we keep printing money…QE2 anyone?)
to hold anyone accountable for money they never got or for dept they never agreed to is clearly not moral wish the austrian school got into this topic more :“Bad for western countries? Good for them? Bad for bankers? Bad for citizens? Good? Good for 3rd world countries?”"would be very hard to break up who its good and bad for. if you dont beleave it is moral dont support it.
Economics is value free. The libertarian position is that there is no obligation to repay.