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Effects
Aug 20, 2009 8:19:07 GMT -5
Post by Nicholas on Aug 20, 2009 8:19:07 GMT -5
Hey guys,
Just wanted you to consider the effects of the issue at hand.
Think about this.
Third World Nations are heavily in debt to First World Nations and thus have crippled economies. Which do you think suffers more, the Third World Nations or First World Nations?
Note that the recent financial crisis that hit the world. Do you think that in desperation, First World Nations may resort to force to gain the capita they loaned to the Third World Nations?
Thank you
Nicholas
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Effects
Aug 20, 2009 8:24:25 GMT -5
Post by roze on Aug 20, 2009 8:24:25 GMT -5
no, i guess the world wouldnt let that happen anyway..
roze.
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Effects
Aug 20, 2009 8:31:36 GMT -5
Post by Aran Lug on Aug 20, 2009 8:31:36 GMT -5
Hey Roze,
I actually disagree with you.
I believe that when the time comes, First World Nations may resort to such measures to ensure the development of their nation.
Look at the World Wars of the past, they are perfect examples of how nations resort to such inhumane methods.
Indeed, you may say that that is a distant past and history will not repeat itself.
But the point is that in this capitalistic world undergoing rapid globalisation, countries are very materialistic and may do anything to gain credit.
Thank you
Aran
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Effects
Aug 20, 2009 8:34:33 GMT -5
Post by concrete1234 on Aug 20, 2009 8:34:33 GMT -5
really?
i doubt this will happen. over the past few years countries have been CANCELLING debt, not adding on to it.
even then im pretty sure the third world has no way to repay it, so big deal even if first world nations "force" third world nations to repay loans. short of sanctions or war, first world nations cant squeeze any more water out of a hard rock.
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Aug 20, 2009 8:38:27 GMT -5
Post by ilikethis on Aug 20, 2009 8:38:27 GMT -5
since no one here has already done so, perhaps we can discuss the relative impacts on the first/third world?
imho, its painfully obvious that the third world suffers more! if thei debt is really so many times more than the size of their economy do you honestly think they can afford basic health care and education? so much $$ already goes towards debt repayment to the rich nations which have gdps millions of times (literally) that of the third world?
tell me, in which part of this world would you say a millionaire that loans money to a beggar suffers more when a beggar has no money to repay his debt?
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Aug 20, 2009 8:40:49 GMT -5
Post by ihatethis on Aug 20, 2009 8:40:49 GMT -5
hrm. not too sure about this though. while ilikethis is probably right, it cant be that the first world dosent suffer at all.
if i remember correctly the site dosent discuss the effects on the first world. third world debt team, mind filling us in?
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Effects
Aug 20, 2009 8:54:23 GMT -5
Post by brandon on Aug 20, 2009 8:54:23 GMT -5
Hi,
Just to clarify, we decided to focus on the detrimental effects of debt on the Third World, because this project revolves around the debt crisis in the Third World (after all there isn't exactly a debt crisis in the First World, is there?)
That being said, as far as I know this had a relatively minor impact on the First World. After all, the main creditors are private commercial banks, and their loans to the Third World, amounting to around at most a few hundred millions each (back in the '70s excluding interest)m, only form a small fraction of their profits which can go up to tens of billions of dollars annually. Furthermore since these are private corporations any adverse effects are more or less borne by the banks themselves, and not the citizens of the First World since their governments still remain fiscally stable and can provide for basic welfare services.
Billions of dollars may be a drop in the ocean for the US with a GDP of 17 trillion, but it easily dwarfs that of Third World nations. Keeping things in perspective, I think the impact on the First World is really quite minor when one looks at the sheer lack of progress in the Third World partially brought about by this debt crisis.
Brandon
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Aug 20, 2009 9:02:03 GMT -5
Post by glendon on Aug 20, 2009 9:02:03 GMT -5
Hi,
I've been following this thread with interest and I'm glad to note that many arguments on both sides are surfacing.
There exists an argument known as the effect of diminishing returns. In layman terms, this is essentially similar to Brandon's point about how billions of dollars is "peanuts" (pardon me) to the First World.
There can be no doubt that we derive much greater satisfaction from the first unit of any good consumed, as compared to say, the hundredth consecutive unit consumed. The first cheeseburger may taste great and yield enormous utility, but the seventh cheeseburger eaten at the same meal may well be a torment (negative utility). Similarly the effect of debt repayment on the First World is much less pronounced than the effect of debt cancellation on the Third World. Despite the sum of money gained (or not lost) being equal, this sum of money is alot more valuable to the money-lacking Third World than the already money-rich First World. Thus marginal utility, the additional utility brought about by one additional unit of goods/services consumed, falls as the consumption of a particular good/service rises. In this case, the good is simply cash.
Pardon the long tirade, but here you can see why some countries suffer more than others in times of crisis - even when what they are going through is similar.
Comments?
Glendon
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drew
New Member
Posts: 2
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Aug 20, 2009 9:06:53 GMT -5
Post by drew on Aug 20, 2009 9:06:53 GMT -5
Hi Glendon, *off-topic* 600k peanuts Anyway, yes i think your analogy is an appropriate one. It is definitely harder for Third World countries to pay debt than for First World countries to lend money. Maybe this can be measure by the %of GDP, as shown in your interactive flash map. Because of this, I feel that there it is definitely harder for some cash-strapped countries to pay off their debts. Cheers, Drew
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Aug 20, 2009 9:08:42 GMT -5
Post by LOLCATS on Aug 20, 2009 9:08:42 GMT -5
i find interesting the discussion on whether first world nations will demand their money back like a unhappy loanshark.
of course no country goes round spray-painting O$P$ on say the government buildings of debtor nations. but they do make alot of noise about the fact that their precious cash is not coming back to them.
ilikethis claims theres a trend towards debt cancellation. nah. methinks that on the contrary first world nations have reneged on their promises time and again. developmental aid always falls far short of what's being pledged, and the same applies here.
the g8 can sit around in their pretty lil retreats at posh european resorts but at the end of the day nothing gets done. sure theres some glitzy press conference, some attempts to patronize the rest of the world by promising debt cuts that never really materialize. but look back and you find debt still mounting, no reall initiative or will to solve the issue, and millions of africans lacking proper sanitation, education, health care, and even clean water and constant food supply.
i need not say more.
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Aug 20, 2009 9:18:13 GMT -5
Post by Sar22 on Aug 20, 2009 9:18:13 GMT -5
Hi all,
I think that both countries actually suffer the same. Debtor nations will have to spend a huge amount of money to pay of the debts, which would affect the amount of money they put into other areas. Nations which loan will have to put up with the loss of capital, and also the possibility of losing their money altogether.
With reference to LOLcats post, I agree that the policies being implemented are not enough. Even though summits always end up with some action pledging support, almost nothing gets done, and life still goes on. I feel that stronger and more definitive action needs to be taken.
Thanks, Sar22
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Aug 20, 2009 9:32:17 GMT -5
Post by Sarah on Aug 20, 2009 9:32:17 GMT -5
Hi I'd like to say that the Third World Nations suffers more obviously because since the financial crisis also hits them, it prolly makes them have even lesser money and all to pay back the First World Nations. I actually think that the First World Nations are getting by pretty fine without having Thirld World Nations paying them back tons of debts and stuff so.. First World Nations would be able to get along better than the Third World Nations even tho theres the financial crisis.
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Aug 20, 2009 9:51:24 GMT -5
Post by Voice of the Poor on Aug 20, 2009 9:51:24 GMT -5
Hi everyone!
This is a very interesting topic and being one whose sentiments are with the the third world countries, I can't help but condemn the 1st world for having an agenda whenever they extend loans to these poor people.
It is not out of magnanimity that the loans were given. These rich countries only want to assert their might and control these pathetic countries whose only crime is not being able to get out of the poverty trap.
Whether or not these poor people can pay or not is not the issue as these prosperous nations just want to have some influence over these countries so that when the time comes for the world to take sides in a conflict, they can be sure to have these third world countries who owe them a fortune to toe the line and not oppose them in any decision made.
Thanks.
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