LETTER: Debts need to be paid

Dear Editor,

I’m concerned about the idea addressed in The Utah Statesman that we can boost our economy by forgiving debts. First of all, “debt forgiveness” is just a spongy term for forced bankruptcy. Debt forgiveness will not boost our economy, but it may “bust” the economy of the country whose debt is forgiven.

Debt forgiveness produces instability, especially for the citizens of the country whose debt is forgiven. The fact that a government has debt will be reflected onto the citizens of that country.

When Enron filed bankruptcy, who paid the price? The employees and share-holders of Enron. If debt is forgiven to countries, who will pay the price? The citizens and investors in that country.

You can’t just forgive a debt and magically make it disappear, someone will pay the price. A valid argument is to ask, “Who will pay this debt?” or “How shall this debt be paid?” Perhaps, in extreme cases, we may find a way for the interest rate to be incrementally relaxed.

Governments should be reformed before debt is forgiven else what would stop them from entering a continuous cycle of accruing debt, having it forgiven, accruing debt, having it forgiven, etc.

Perhaps bankruptcy is the right answer for some very impoverished countries. If it is, it is up to that country to decide. Our help is not helpful when we assume the prerogatives that rightfully belong to others.

Debt forgiveness is just forced bankruptcy. It tells the world we have no confidence in the government and people of this or that country to make good decisions. If forced bankruptcy may ever be justified, it should be only for the very, very rare exception. Debt forgiveness should never be the rule.

Jared K. Sorensen