[BrianC]

A dozen poor countries are facing economic instability and even collapse under the weight of hundreds of billions of dollars in foreign loans, much of them from the world's biggest and most unforgiving government lender, China. From a report:
An Associated Press analysis of a dozen countries most indebted to China -- including Pakistan, Kenya, Zambia, Laos and Mongolia -- found paying back that debt is consuming an ever-greater amount of the tax revenue needed to keep schools open, provide electricity and pay for food and fuel. And it's draining foreign currency reserves these countries use to pay interest on those loans, leaving some with just months before that money is gone. Behind the scenes is China's reluctance to forgive debt and its extreme secrecy about how much money it has loaned and on what terms, which has kept other major lenders from stepping in to help. On top of that is the recent discovery that borrowers have been required to put cash in hidden escrow accounts that push China to the front of the line of creditors to be paid.

Countries in AP's analysis had as much as 50% of their foreign loans from China and most were devoting more than a third of government revenue to paying off foreign debt. Two of them, Zambia and Sri Lanka, have already gone into default, unable to make even interest payments on loans financing the construction of ports, mines and power plants. In Pakistan, millions of textile workers have been laid off because the country has too much foreign debt and can't afford to keep the electricity on and machines running. In Kenya, the government has held back paychecks to thousands of civil service workers to save cash to pay foreign loans. The president's chief economic adviser tweeted last month, "Salaries or default? Take your pick."https://fortune.com/2023/05/18/china-belt-road-loans-pakistan-sri-lanka-africa-collapse-economic-instability/

[Plantagenet]

paying back that debt is consuming an ever-greater amount of the tax revenue needed to keep schools open, provide electricity and pay for food and fuel.

It's the same problem the Biden Administration is facing now . The US debt has gone up so quickly along with interest rates that paying the interest on the US debt has quadrupled in the last two years----it now costs ca. $800 billion a year-----its the largest item in the US budget now.

But the Biden administration has a solution that the other countries who owe money to China might consider.

According to Joe Biden the solution is to just increase your debt limit, and then borrow more money in order to pay the interest on the money you already owe. Sure the debt goes up even higher that way, and the interest payments get bigger and bigger every year, but thats OK--- the next time you can just borrow more money again. And again. And again. What could go wrong?


You countries owe money? No problem....just do what I do..... borrow more money to pay the interest on the money you already owe. It works every time!

Problem solved----the American way!

[AdamB]

According to Joe Biden the solution is to just increase your debt limit, and then borrow more money in order to pay the interest on the money you already owe. Sure the debt goes up even higher that way, and the interest payments get bigger and bigger every year, but thats OK--- the next time you can just borrow more money again. And again. And again. What could go wrong?

Good thing he doesn't have the prior administrations record on the topic I suppose.

Donald Trump Built a National Debt So Big (Even Before the Pandemic) That It’ll Weigh Down the Economy for Years]

[Plantagenet]

Donald Trump Built a National Debt So Big (Even Before the Pandemic) That It’ll Weigh Down the Economy for Years

And Joe Biden Built the National Debt even bigger to weigh the economy down for even longer......

There's no way around it.....we've got a debt problem.

Its gotten to the point that the US now has a debt problem that isn't dissimilar to that hitting third world countries.

And just to make things even worse, in the last two years interest rates on debt have jumped much higher, causing the price of paying the interest on the US debt to nearly quadruple in just two years.

The jump in interest rates is why this problem is coming to a head right now both in the US and for other third world debtor countries.

The US used to pay about $200 billion per year in interest....but in the last two years its jumped to ca. 800 billion dollars in interest payments. Thats a total waste of money that could be spent on other things. Just like 3rd world countries, spending in the US is being crowded out by the need to pay interest on our debts.

So what should the US and these other countries do??

Joe Biden says the only possible solution is to borrow even more money and create even more debt to pay the interest on the existing debt....thereby increasing the debt even further and interest payments even more down the road..


Joe Biden says the only possible solution is to borrow even more money to pay the interest on the existing debt.

Should other countries with debt problems follow Joe's wisdom on the debt? Or not?

What do you think?

Cheers!

[theluckycountry]

dozen countries most indebted to China... paying back that debt is consuming an ever-greater amount of the tax revenue needed to keep schools open, provide electricity and pay for food and fuel... Behind the scenes is China's reluctance to forgive debt and its extreme secrecy about how much money it has loaned and on what terms, which has kept other major lenders from stepping in to

Oh I wish AP could point me to some lenders who will loan me a truckload and then forgive it when my corrupt government siphon it off for their own personal booty. There are Two sources of media on the planet. The Western ones who are a part of the corrupt dying rules based order and the sources in nations trying to break away from it. Frankly I'm sick of wading through these unsubstantiated Western articles that are anti-China, anti-Russia.

Everyone in the West was singing China praises for the last few decades, right up until China decided that it wasn't going to be the manufacturing lackey fueling the West through $US exchanges. Now it all "Evil China" Well for 20 years I have been negative on China. Their products for the most part are crap and their repressive communist system is anathema to all I hold dear but that doesn't mean I'm going to run with the current herd of political hacks that want to denigrate it for doing what the US Britain and France have been doing for hundreds of years.

The Media can't say the truth, they have to come out with these BS stories because they want to whip the masses into an emotional frenzy so they have cannon fodder for future wars. It's the same old story, over and over and over and soon your sons and daughters will be off to the slaughter, yet again. Evil Russia, Evin Iran, kill them all and make the world safe for $US trades.

[AdamB]

Donald Trump Built a National Debt So Big (Even Before the Pandemic) That It’ll Weigh Down the Economy for Years

And Joe Biden Built the National Debt even bigger to weigh the economy down for even longer......

There's no way around it.....we've got a debt problem.

Good thing then that Biden's yearly deficits have been smaller than Trumps last 2 years, a good start by Ol' Sleepy Joe.

And of course we have a debt problem.

So what should the US and these other countries do??

The US can make sure the Trumpster doesn't get back into office and start running up the largest yearly deficits seen in the countries history for starters? As for the other countries, most of them don't have traitors aimed at their Presidency, so they'll do ok.

Joe Biden says the only possible solution is to borrow even more money and create even more debt to pay the interest on the existing debt....thereby increasing the debt even further and interest payments even more down the road.

Pretty much the same solution Trump followed while in office. Oh well...good thing Joe began bringing down Trumps annual deficit, and Alaskan intelligentisia didn't make it into Congress?

[Plantagenet]

The Media can't say the truth, they have to come out with these BS stories

The media spews a lot of BS stories, but the story about the Chinese making huge loans to third world countries and then using them to gain control over the resources of those countries is totally true.

I've seen it myself in multiple African countries........imagine you are in Africa in what seems like seem gently decaying colonial backwater of a third world country, crudely overprinted with half-baked tribal-Socialist governments, and suddenly you come upon some wildly out-of-scale infrastructure that makes absolutely no sense. I've seen a giant freeway being bulldozed across Swaziland the begins and ends nowhere.....I've seen a gigantic bridge built across a river in Mozambique......I've seen armies of Chinese occupying farmland in Zimbabwe.......all being paid for through "loans" made by China. And CHINA often bribes the local officials to get to sign the loans.....and when the vig on the loans doesn't get paid the Chinese come in and take all the land around the Freeway and take the best beachfront land across the bridge in Mozambique and take the farmland in Zimbabwe.

The Chinese are practicing a new kind of colonialism on a huge scale in Africa and other places, complete with land theft....


The Chinese are practicing a new kind of colonialism in Africa

Cheers!

[ralfy]

https://www.politico.com/news/2023/04/1 ... k-00090588

China operates like any commercial bank: requires collateral, and calls in loans.

But G-7 through the U.S. and the IMF-WB did something else, i.e., structural adjustment: it provided aid and loans with strings attached, i.e., the borrower had to raise taxes, decrease government spending, focus on agricultural subsistence and light industry in order to make money quickly, and pay back the loan plus show off a budget surplus (thanks to raising taxes and decreasing government spending) in order to borrow more money, and rely on import liberalization to make up for any lack in goods and services.

The intent was to make borrows practice fiscal responsibility, but the results were disastrous: lower government spending led to increasing poverty, and a focus on subsistence and light industry led to poor economic growth and de-industrialization.

Worse, that made the borrowers even more dependent on the IMF-WB, which turns out is what G-7 wanted in the first place: make the borrower weak and dependent on them so that they could find ways to take advantage of any cheap labor and natural resources.

That's what happened to countries like the Philippines. In contrast, Asian countries got very good deals with no strings attached, and because of that industrialized. More unusual is China, where the Communist Party became an active partner in foreign-local partnerships. This led to one of the highest and sustained economic growth rates in the world.

It was only decades later that G-7 began to forgive loans, just as the credit that they were providing to the world economy decreased. Now, they want China to do what they could not immediately.

[AdamB]

It was only decades later that G-7 began to forgive loans, just as the credit that they were providing to the world economy decreased. Now, they want China to do what they could not immediately.

So the G-7 did good, and you are now under the impression that China does what the G-7 wants? Really? They kowtow to the blonde and blue eyed Europeans and Americans do they? Yeah...not so sure about that one, maybe it looks like that from the Phillipines or other pipsqueak countries, but the citizens of the big boys know better.

[theluckycountry]

The Media can't say the truth, they have to come out with these BS stories

The media spews a lot of BS stories, but the story about the Chinese making huge loans to third world countries and then using them to gain control over the resources of those countries is totally true.

I've seen it myself in multiple African countries... half-baked tribal-Socialist governments, and suddenly you come upon some wildly out-of-scale infrastructure that makes absolutely no sense.

Cheers!

Well of course that part of the story is true, that's the basis for the loans in the first place. They are not corrupt like the World Bank, they will lend if they see a return, and they aggressively work towards getting that return. And of course they are on the ground doing the work, the tribal people won't do it will they, they are for the most part a shiftless useless lot. Look what happened to Rhodesia.

These western news say half truths and then ad a load of spin to twist it. All the West through the World bank has done is load the poorer nations up with debt, see that their currencies are debased and then live off the interest for perpetuity. It's rent seeking in its vilest form.

And just because you can't see the sense of the freeways and bridges doesn't mean there is no purpose to them. The Chinese want the same thing as the old Empires want, Food, minerals, oil. Only they are going about it in a more humane way, they are not going in and setting up garrisons and slaughtering natives like the British and Americans did (in the philippines)

What do you want them to do, offer no aid? Give Billions with no oversight and let the African Toadies spend it on French wine and Bentley limos? Or do just want the Africans to live on in squalor until the West decide it's time to go back in and pick up the pieces of the old Empire.

[theluckycountry]

https://www.politico.com/news/2023/04/11/china-lending-imf-world-bank-00090588

China operates like any commercial bank: requires collateral, and calls in loans.

But G-7 through the U.S. and the IMF-WB did something else, i.e., structural adjustment: it provided aid and loans with strings attached, i.e., the borrower had to raise taxes, decrease government spending

Exactly! The WB is just a whore working for the US, the US is hopelessly broke, they have totally screwed their public economy and now they look all around the globe for who they can screw over with $US clips and their worthless paper so the bloated SS net can keep functioning. There is 100 Trillion in unfunded liabilities in the US pension system if you project forward, no one is getting even a decent chunk of that.

The US should pull a USSR style collapse (if they were smart) and write off all those liabilities and start from a more rational base. But the US isn't smart, or has the political courage to face the people with it. I would expect that the establishment will simply muddle on through until the crises hits, and then all the politicians will jump on their private jets for greener pastures. Like the Bush Family's 100,000 acres down in Paraguay. They call Putin an Oligarch, what a joke.

[AdamB]

They call Putin an Oligarch, what a joke.

They call Putin an authoritarian thug. They call all his toadies oligarchs. Sort of like your King, and the toadie countries that bow and scrape when he shows up to collect the tithe from those who, get this, haven't even been given the mineral rights to the land they own. Talk about hapless fools pretending they own property...what is the rule in Australia? Plow deep? And everything else owned by the benign state standing in for your King? I know in Canada when you checked out the drilling permit it was right there. It was amazing for an American born in a land where once we fought off the global empire that enslaved Commonwealth countries and their toadie serfs that didn't have what it took to fight free, to see the proof of it right there on that little piece of paper. Where it said "Mineral Rights" was always the words, "The Crown". You folks don't even own the LAND you buy and you want to pretend that America is the one with problems. Please. Grow a pair, get the rights to your land, throw off the yoke that America did a quarter millennium ago, and you'll only be a quarter millennium behind. Get crackin'!

[Plantagenet]

The US should pull a USSR style collapse (if they were smart) and write off all those liabilities and start from a more rational base. But the US isn't smart.

You paint with too broad a brush.

The US is plenty smart.....we just happen to have an elderly and mentally challenged president at the moment who doesn't know what is going on.

Once we get rid of the elderly and mentally challenged Biden and elect a dynamic young President with new ideas as our leader the US will do better, I promise you.



Cheers!

[mousepad]

The US is plenty smart.....we just happen to have an elderly and mentally challenged president at the moment

you're funny. The "plenty smart US" voted for the mentally challenged in the first place. Even if the mentally challenged president is replaced by a dynamic young president, the underlying mentally challenged population who voted for the mentally challenged president remains. My neighbor voted for Sleepy. No wonder there, he also thinks 1+2 * 3 = 9. Plenty smart, them demwit voters.

Its a sad show no matter what. Both of the two candidates have mental issues. Can't a nation that builds aircraft carriers and subs and put a man on the moon come up with some good politicians? Maybe not. Maybe banana bending is the future of america. Based on the quality of its politicians it might as well be.

[AdamB]

The US is plenty smart.....we just happen to have an elderly and mentally challenged president at the moment

you're funny. The "plenty smart US" voted for the mentally challenged in the first place.

Both of them. We are at least consistent...vote for stupid old men twice in a row. And the way it looks, might be THREE in a row.

My neighbor voted for Sleepy. No wonder there, he also thinks 1+2 * 3 = 9. Plenty smart, them demwit voters.

Both my parents went for the traitor. Twice. No wonder there, they are his kind of voters...suckers who bought the hype. They are also lifelong Democan voters. That was the true trick the pre-traitor (in 2016) pulled off. Convincing folks rightly they had been abandoned by their normal party representatives, and he would do better. Once that was revealed as a lie, folks thought, "well, old and dumb looks better than scumbaggery, nepotism, and economic mismanagement".

It'll be interesting to see which way folks swing in 2024.

Can't a nation that builds aircraft carriers and subs and put a man on the moon come up with some good politicians?

Of course we can. But the oligarchs don't want them, so we aren't going to get them.

Maybe banana bending is the future of america.

That market has already been cornered by the Queenslanders. Only Australia has folks THAT thoroughly incompetent to do anything else.

[theluckycountry]

You paint with too broad a brush.

The US is plenty smart.....we just happen to have an elderly and mentally challenged president at the moment who doesn't know what is going on.

And that's why your stupid, or dumbed down. All you can do is think in election cycles. and every-time a new president is elected you blame him for all the woes of the nation and forget all about the last ones. If you didn't think so much like goldfish you'd realize that the Biden management is no different that the trump or obama or bush or clinton ones were. They have all maintained the same corporate policies that have been crippling your economy as far back as the end of WWII.

Ridiculous military spending, super-high medical care, the outsourcing of all decent jobs so the corporations can have larger profits. The list just goes on and on and proves that the elected officials don't actually run western democracies, the Banks and corporations do.

Now your on another lap around the goldfish bowl, same ol same ol same ol

[theluckycountry]

Can't a nation that builds aircraft carriers and subs and put a man on the moon come up with some good politicians?

That had nothing to do with President's and all to do with oceans of oil. The US oil reserves peaked in the 70's and it's been all downhill since then.

"There's Poop Everywhere": San Francisco's Office District Not Only A Ghost Town, It's Also Covered In Sh*t
https://www.zerohedge.com/political/the ... n-its-also

...For starters, feces were found far more often in commercial sectors, covering "approximately 50% of street segments in Key Commercial Areas and 30% in the Citywide survey," second only to broken glass as can be seen in the 'illegal dumping' section.

2nd world nation now, rapidly heading toward third world. Just imagine a citizen of Singapore visiting such a place, even a lowly factory worker would be disgusted.

[AdamB]

And that's why your stupid, or dumbed down. All you can do is think in election cycles. and every-time a new president is elected you blame him for all the woes of the nation and forget all about the last ones.

Yeah...suckling at the teat of a Queen seemed ok over your lifetime because you born into it. How about now? Keep up the good work, on your knees for the King.