>It would seem to me that no new wealth can actually be "created" by the
>speculative exchange of paper, as opposed to the production of real physical
>wealth created by human labor, i.e. the production of capital goods.
>However, the debt extracted from regions like Sub Saharan Africa has real
>physical consequences in that capital is allocated for debt service which
>could have been used to create real wealth or improvements in the standard
>of living -- like basic health care.
You're right about the difference between paper wealth and claims on real resources. But in pure balance sheet terms, forgiving the debts of the so-called HIPCs (highly indebted poor countries) would be nearly invisible to the creditor countries. The financial aspects aren't so important - it's the use of the debt as a political instrument of subordination.
The 41 HIPCs, mostly in Africa, spend 1.6% of GDP on health, 3.0% on education, and 5.3% on debt service. Their debt service eats up about 90% of their grant income.
Doug