>I don't doubt at all that debt is used to subordinate poor counties, but if
>debt forgiveness would be financially inconsequential to the creditor
>nations, why is it always a "crisis" with "systemic implications" when some
>Third World nation looks like it might default on its debt?
Depends on the Third World nation. If Brazil or Mexico were to flip their creditors the bird, that wouldn't be a small matter. The 41 HIPCs all together owe about $206 billion; Mexico alone, about $150 billion; Latin America, about $750 billion. And the HIPCs creditors are mainly governments and official banks like the World Bank, while Latin America's are mostly commercial banks and private bondholders. A default by a major debtor nation, especially a conscious political default, would not only have an effect on the private financial system, it might also cause creditors to panic, pulling their money out of anything that looked vaguely risky (not only other Third World debtors, but domestic U.S. junk bonds too), and might embolden other debtors to default as well. So talk of systemic risk isn't just propaganda. But that isn't to say there's no propaganda content to the crisis talk, it's also a way to discourage debtors from contemplating default and to soften up voters in the creditor countries for any bailout that might come to pass.
Doug