Doug Henwood wrote:
> >If in fact the inflationary aspects could be entirely avoided by
> >defaulting on debts, well then, that's a national economic policy a lot of
> >countries could avail themselves of today.
> Could and in my view should, and (I predict) increasingly will now that
> Russia and Ecuador have come through the process without Armageddon,
> whatever Charles Dallara and the IIF say.
Many years ago the WSJ printed an article in which the writer proposed this for indebted third-world nations. He posited a Treasury Minister in Argentina named "Aquinas Marx," who noting that (after subtracting debt payments) Argentina's exports could pay for its necessary imports, so he defaulted on the debt. I don't remember who the writer was.
Incidentally, if Doug is correct in his prediction of such defaults, this point is relevant to the debate going on re strong states. In the 19th century England & the United States tended to send gunboats and/or marines to any nation which did not pay its debts. I suspect the imperial powers of today would do the same unless the defaulting state was strong enough to inflict too much damage on such a response.
A Bolivian Pat Buchanan might not be so bad for either Bolivia or the rest of the world.