Debtocracy

In one of our meetings with Freedom from Debt Coalition (FDC) we were asked to watch a documentary entitled “Debtocracy”. The documentary is mainly about the Greek-crisis and few other countries experiencing crisis after getting loans. The term “debtocracy” is defined as the condition by which Greece found itself trapped in its debt. The documentary mentioned two factors why Greece experienced crisis, loaning and corruption. Greece’s nationalization, failure of implementing tax policies, bad economic policies, and the use of new loans to pay old debts has led Greece to economic collapse. Greek economists are currently doing a research on cancellation of debts. They believe that cancellation of debts is the best solution for their economy to recover. Ecuador was able to cancel their debts after proving that loans made in the past were illegal, and because of this Ecuador was able to save about $7 billion. FDC follows this thought of the documentary – that debt cancellation is also possible for the Philippines.

 

 

Katreena Mae T. Villanueva

2012-30409

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5 thoughts on “Debtocracy

  1. History indeed is important in studying Economics. We may learn lessons from the past experiences of others. That’s why it’s really advantageous to take some Economic History classes such as History of Economic Thought and Philippine Economic History.

  2. We’re currently in debt mainly because Cory Aquino chose to honor all debts of the Marcos regime to make investors more confident through the idea that the country does run away from their responsibilities…
    A good move to do back then, but this action affected our economic progress severely since a lot of money was spent yearly in paying the interest of the loan instead of any form of investment…
    It may seem hard to consider the original loans to be “illegal” if the president had honored it…

  3. It is indeed true that anything in excess is bad. Loans can be used as a tool to finance government activities even if it it doesn’t have the money on hand yet, but if the government keeps on taking loans without considering how to repay them, then that becomes a problem. Loan terms should be carefully considered when taking a loan.

  4. Indeed, excessive loans combined with corruption would lead to economic collapse and illegitimate debts must be cancelled.

  5. I think you’re right. Illegitimate debts ought to be cancelled. Debts are merely tools, and since they are tools, they don’t have any inherent moral disposition of some sort. Not all debts are bad. Some debts are inevitable perhaps even necessary. The main lesson perhaps is to manage debts carefully.

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