It seems as if the majority of the nations in the world seem to hold a debt to some other nation. Of course everyone wants their money, and people normally seem to want something tangible; something that gives the proof that they have a higher standing in the world than others. But what if nations that are in debt to each other allow their debts to the other cancel out? Like, if nation A owed nation B $15,000 and nation B owed nation A $12,000 dollars, couldn't they just cancel out each other’s debt of $12,000 so nation A would only owe nation B $3,000 and nation B owed nation A nothing? In essences, that's all debt really does. A pays B so B can pay A, but the debt is such a mass amount of money that it makes it impossible to pay of at one time, and almost impossible to pay off ever, because with every new purchase, nations go into greater and greater debt. Would it not help the nations of the world to get a little better idea of money if they could start a clean slate, or nearer to a clean slate? If one has a debt of $100,000 what's another $20,000? But if one owes nothing, $20,000 dollars of debt is a lot.
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The problem is, foreign debt isn't usually to the nation itself, but to a company within that nation. I don't think that the American public would like it very much if their tax dollars went to subsidies for Germany's debt to Phillip Morris because we had a debt to Bayer.
I like your play on Adam Smith's title, by the way.
--Mike
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Reagan once said, "I'm not worried about the deficit, it's big enough to take care of itself."
Oops, Ronny, it actually ended up being future generations that had to take care of your debt. *eyes roll* And it looks like we're digging ourselves into deeper debt now under the Bush Admin. *eyes roll*
But there is something called 'debt forgiveness,' which is what you kind of described in you post. This is very helpful to the third world, and helping impoverished countries develop and combat poverty.
A lost of impoverished countries owe a lot of money to foreign nations, and spend massive amounts of their budgets in 'debt servicing'--literally paying INTEREST on their huge debts.
Debt servicing can account for as much as 80% of poor nations' valuable budgets. Now how are these nations supposed to fight poverty with that massive drain in their pocketbooks?
So debt forgiveness is a cancellation or delay of debt, which can be very helpful for poor countries.
Unfortunately, it keeps getting swept under the rug at G8 conferences. What a farse.
Allison
"Be the change you want to see in the world" ~Mahatma Gandhi