re: Ch. 11 for nations:
This would merely formalize a process that already exists. Once a government has a big enough debt, it gains power over the creditors, and, sooner or later, finds a way to default on all or part of the debt. The creditors, of course, bring to bear whatever economic/diplomatic/military/political leverage they have. Frequently, in fact, the whole reason a rich country lends money to a poor nation, is to gain economic/political control, and there is little expectation of the loans ever being repaid. This happens all the time, and the costs get "externalized" (= paid by taxpayers in rich countries). This process has been going on for centuries.
As an example, look at how the U.S. is suddenly getting a lot more lenient with Pakistan, (lending new money and forgiving old loans), now that we need use of their airfields. |
