How do you declare international debt illegitimate?
When is debt so odious that the taxpayers of a government have no obligation to pay it back?
This is a huge, important question. It’s a question currently plaguing Argentina and Greece, for example. Individuals in both countries have explained to me that the debt was taken on by previous regimes that stuffed their own pockets, and then amplified by terrible deals with predatory investment banks. The average individual citizen feels very little personal responsibility to pay that debt back, consisting as it does of interest payments to the banking system.
The movie we showed at Alt Banking last week, Who’s Saving Whom, also made the case that Spain could declare its taxpayer debt illegitimate, considering that the banking system got bailed out on the taxpayer dime.
Well, now the Center for Global Development has come up with an idea in this…
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