The 26 poorest nations in the world are more heavily in debt than any time in the last 18 years, according to a new report. Climate change and conflict are major drivers of poverty in the affected countries.
The World Bank published a new study late on Sunday highlighting 26 countries that “are in deeper debt than at any other time since 2006.”
The list includes Afghanistan, Yemen, Syria, and North Korea. Most of the other nations are in sub-Saharan Africa, and include Ethiopia and Chad.
With an annual per capita income of less than $1,145 (€1,050) a year, the World Bank said these countries “are poorer today on average than they were on the eve of COVID-19,even though the rest of the world has largely recovered.”
That I absolutely agree with - debt that is taken on as an investment can be well worth it and, imo, a lot of our government debt is well spent (outside of military bullshit which is deeply wasteful).
The issue is that debt needs servicing and if it’s wasteful spending we’re committing to paying back more value than we’re borrowing. I’m not an anti-debt person, I think borrowing for investment is a generally good idea - I’m just opposed to a certain vein of modern monetary theory that declares that US debt is unlimited and free because the world runs on the US dollar.
MMT would claim rather simply that the debt can be paid back by printing more money. More money in the system means more people are employed. If you have full employment, more money leads to inflation and to fight inflation governments need to raise taxes, to take money out of the system. Obviously taxes can not be raised to infinity.
So no MMT does not claim the US can just borrow money without long term costs.