From Planet Money:
But those poor (and developing) nations have their own group. It's
called the anti-G20, in a nod to the G20 collection of industrialized
states. The anti-G20 met at the U.N. last month, where Nobel Laureate Joseph Stiglitz and Martin Khor explained what keeps impoverished countries down. Answer: Their debt to the IMF and wealthier nations.
There are plenty of things rich countries do to make poor countries poor. Refuse to trade with them. Give the thugs who run the country money. But this IMF argument has always struck me as strange. The poor countries are poor because they IMF expects them to pay back the money that the poor countries borrowed? How do the loans get made in the first place? Don't the thugs who borrow the money bear some of the responsibility? How would forgiving those loans solve the problem?
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I dont understand why dont the poor nations just got F*** themselves ! !Amn the wealthy nations should get off their FAT asses and HELP the F***** people out ! !
A politically liberal friend just gave me an article by Stiglitz titled “Stimulate or Die”. I was considering how to rebut it when I came across this article.
If government stimulus is supposed to revive moribund economies, why do massive World Bank funded projects and foreign aid fail to lift African countries out of poverty? In fact, using the Keynesian tactic of confusing correlation and causation, one would conclude it exacerbates poverty. Given that aid involves no increase in public debt and that much of the debt connected with major infrastructure projects will be eventually forgiven, these stimuli should be even more effective than what Krugman and Stiglitz propose we need in the US. Is it possible that government is generally ineffective in deploying investment capital and that increases in exogenously derived (as I would describe federal government spending funded by Chinese t-bond buyers) social spending provides no long term benefit, beyond a short-term voter palliative?
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