Iraq Debts Add Up to Trouble

LA Times ^ | April 4, 2003 | Warren Vieth

[anguish]

WASHINGTON -- To hear some Bush administration officials tell it, the reconstruction of Iraq will largely pay for itself, thanks to a postwar gusher of petroleum revenue.

"The one thing that is certain is Iraq is a wealthy nation," White House Press Secretary Ari Fleischer said.

A look at the national balance sheet tells a different story.

[anguish]

This has bothered me for quite some time after seeing similar calculations by economists on a conservative mailing list. Though this piece is from a leftist rag, it's not making me feel any better about the economics of post-war Iraq. I just hope that my worries are unjustified.

Freeper@Sweden

[thoughtomator]

Japan had almost no natural resources to start 1946. It's now the second largest economy in the world, more than twice as large as any nation in Europe.

Freedom is that good. The oil is just gravy.

[Thebaddog]

Hussein has more assets than they have debts. Put a lien on the absolute ruler and stop yer bitchin.

[Larry Lucido]

Who does Iraq owe, besides France, Germany and Russia?

[Arkinsaw]

Don't feel like registering to read the article, but how much of this debt is owed to France and Germany? As far as I am concerned the new government of Iraq can disavow every penny of that debt and then we will see what the French and Germans can do about it.

[Bonaparte]

Reason it through. All those countries, including Russia, who extended substantial credit to Saddam did so because they knew he could pay. And they knew he could pay because Iraq, along with Saudi Arabia, sits atop the largest oil deposits in the world. With Saddam gone, those deposits are still there.

What's more, the Iraqi people are not responsible for the debts incurred by the madman who took over their country. They never asked him to incur those debts. Russia, France and China essentially made personal loans to Saddam Hussein. If he survives, maybe they can take him to "large claims court."

[Bonaparte]

China. Technically.

[Larry Lucido]

Good analysis. Thanks.

[exit82]

Sounds like an economic recovery plan to me. The debts to Germany,France,Russia, and China get paid to them in the bills with Saddam's picture on it, then we declare them worthless. They can then use it as toilet paper for all I care.

I've told my reps in DC that there should be a tax on every barrel of Iraqi oil so our $ 80 billion gets paid back. Otherwise, we pay back $ 320 billion over 30 years in Treasury bonds for the debt. Why should my grandchildren be paying for Saddam's removal? Let the SOBs in "Old Europe" pay for it. Serves 'em right.

[jimkress]

Iraq Debts Add Up to Trouble

The new government of Iraq is not responsible for the debts of the Saddam regime. Why else would the French, Russians, and Germans be so pissed off about the regime change?

There is not (nor will be) any "debt trouble".

[js1138]

I don't think they're gonna pay for illegal weapons and materials. Just let someone try to present an itemized bill.

[Bonaparte]

"...what the French and Germans can do about it."

Absolutely nothing. They don't have the clout. If the people of Iraq refuse to assume responsibility for Saddam's personal loans, his creditors will have to eat it. Couldn't happen to a nicer bunch of fascist collaborators.

[paul51]

So, Iraq owes China, France, Germany and Russia?

What's the equivalent of Chapter 7 for a country?

[Bonaparte]

"...an itemized bill."

LOLOL! Kinda like a drug dealer taking one of his junkies to court for not paying the invoice within 60 days.

[Paleo Conservative]

Who does Iraq owe, besides France, Germany and Russia?

Even better. Iraq could hit them double by refusing to pay that debt and freezing those countries out of new contracts.

[Timesink]

Hussein has more assets than they have debts. Put a lien on the absolute ruler and stop yer bitchin.

We can forgive the debts of entire Third World nations and nobody bats an eyelid. What's one more?

Also, people tend to forget that in economics, it's almost impossible to find unanimity on any subject at all. I could do a Google search and find twenty "prominent economists" in less than a minute that would be happy to give you a soundbite saying the US is doomed to total economic collapse by 2010. I could find another twenty, none of whom would give even slightly similar responses when asked a simple yes-no "Are we in or near a recession?" question.

When you need to scare people in order to score you political point, just call a university economics department. They'll find someone to give you just the quote you're looking for.

[Thebaddog]

Nixon took us off the gold standard in 69, and it's been going to hell ever since.

[Bonaparte]

"What's the equivalent of Chapter 7 for a country?"

The lender nations can demand payment and Iraq can refuse. The lenders can then --

1) invade and take what they are "owed"
2) use their international economic clout to pressure the borrower into paying them
3) plead their case before some phony international body that has no ability or authority to enforce its decision

Number 1 ain't gonna happen. Number 2 is doubtful, except possibly from China (France, Germany and Russia are economic non-entities at this point and their future looks dim). Number 3 has only entertainment value.

So, the only one to worry about is China. We are unfortunately entangled with them economically. However, if push came to shove, it would most likely be a standoff -- both of us would get hurt. And I don't think it's worth it to China to endanger the billions they are making off of foolish American companies and even more foolish American consumers, just to collect from Iraq. If they're true to form, they will huff and puff and threaten to nuke Iraq. Then they'll shut up. Just like they're going to do when we settle North Korea's hash.

[John123]

I seriously doubt the new Iraq will honor contracts signed by Saddam's regime. Why should they? Most of that debt was probably incurred as a violation of the post Gulf-war agreements...

[lilylangtree]

If a democratic Iraqi govt is finally set up, then Iraq with the UN sanctions gone and developed nations pouring in technical expertise Iraq can realistically surpass Japanese supremacy in a rebuilt nation. The sky's the limit for the rebuilding of Iraq for its citizens, who have never known freedom and a quality of life of any kind. Note post-war Japan. Besides, are there any present islamic nations democratic? No, because each leader believes in the subjugation and domination of their people and therefore are despicable despots sitting on lots of oil. Hussein was no different only he went further and developed WMD.