Unfortunately I have to agree with a lot of what you say here. I have always thought it was crazy for the World Bank and IMF to give big loans to dictatorships and then when the tyrant is overthrown expect the country to repay the loan. My position, you lend money to a dishonest government, you collect from THEM, not the unfortunate people stuck with the cleanup.
Seems to me that you can’t just stiff the banks.
No matter the status of the Chief Executive of a nation, those funds are loaned out on the premise they will be used for the good of the nation.
The banks aren’t a criminal enterprise for making the loan.
Sometimes those loans prevent financial meltdowns in the nations. They give more time for the nation to get back on track and pay down their loans.
This puts the banks in the position of not giving loans and hurting a nation, or making the loans and hurting a nation.
Who pays those loans if the nation doesn’t? Well, you guessed it. We do. Our interest rates are affected by these types of defaults.
Do we deserve to pick up the tabs to keep banks solvent?