US aggressive borrowing

Starting in the 1980s US accrued a lot of debt, mainly fueled by military spending
Debt mostly in form of T-bonds held by institutional investors in countries that are basically US military protectorates and are covered in military bases that the debt pays for (Germany, Japan, South Korea, Taiwan, Thailand, Gulf States)

pg 6

Haiti’s debt peonage

After Haitian rebellion, France insisted Haiti owed them 150,000,000 Francs (about 18 Billion Dollars in 2011 money) in damages for the plantations they expropriated and the expenses of the French military expeditions, and then got everyone (including the US) to embargo Haiti until the debt was paid.

Haiti was finally forced to pay the equivalent of $21B between 1925-1946, when they were under US military occupation for the most part

pg 6

France and Madagascar’s debt

-1895 France invades Madagascar, disbands govt of Queen Ranavalona III, declares country a French colony
-France wanted their colonies to be self-sustaining, so they impose heavy taxes to pay for the invasion and to build railroads, highways, bridges, plantations, etc that the Malagasy didn’t want and were really just designed to help the French extract wealth via ports
-France then killed a bunch of people who protested this arrangement (about 100,000 in one revolt in 1947 alone)
-But Madagascar is still held to owe France money

Graeber’s first response to why you don’t have to repay debt

Starts specifically dealing with the Third World Debt crisis from here.
-Most of the loans were taken out by unelected dictators who put the money in their swiss bank accounts, and now the banks were trying to collect not from them/their children but “by literally taking food from the mouths of hungry children”
-They had repaid the debts many times over, but interest meant they hadn’t even touched the principal
-Banks were making major free-market economic policy demands in exchange for re-financing, and “it was a bit dishonest to insist that countries adopt democratic constitutions and then also insist that, whoever gets elected, they have no control over their country’s policies anyway”

Then he gets more general, pointing out that forcing banks to take on risk when they lend keeps them from making crazy loans knowing they can extort the borrower if he can’t repay.
“Imagine there was soem law that said they were guaranteed to get their money back no matter what happens, even if that meant, I don’t know, selling my daughter into slavery or harvesting my organs or something. Well, in that case, why not? Why bother waiting for someone to walk in who has a viable plan to set up a laundromat or some such? Basically, that’s the situation the IMF created on a global level– which is how you could have all those banks willing to fork over billions of dollars to a bunch of obvious crooks in the first place.”

pg 2-3

Graeber on the IMF

“The International Monetary Fund basically acted as the world’s debt enforcers– ‘You might say, the high-finance equivalent of the guys who come to break your legs.’ I launched into historical background, explaining how, during the ’70s oil crisis, OPEC countries ended up pouring so much of their newfound riches into Western banks that the banks couldn’t figure out where to invest the money; how Citibank and Chase therefore began sending agent around the world trying to convince Third World dictators and politicians to take out loans (at the time, this was called ‘go-go banking’); how they started out at extremely low rates of interest that almost immediately skyrocketed to 20 percent or so due to tight U.S. money policies in the early ’80s; how, during the ’80s and ’90s, this led to the Third World deb crisis; how the IMF then stepped in to insist that, in order to obtain refinancing, poor countries would be obliged to abandon price supports on basic foodstuffs, or even policies of keeping strategic food reserves, and abandon free health care and free education; how all of this had led to the collapse of all the most basic supports for some of the poorest and most vulnerable people on earth. I spoke of poverty, of the looting of public resources, the collapse of societies, endemic violence, malnutrition, hopelessness, and broken lives.”

pg 2