World tettering on the brink .... why don't countries start forgiving debt?

[RMCF]

As the outlook gets gloomier by the day, with a great depression being predicted by some, I was wondering why debt forgiveness isn't on the cards at all?

Now I am no expert, and supposedly Europe/UK/USA owes a lot of money, so I am guessing it is to China? Is this right?

Plus of course they all owe money to each other. Everyone seems to be in debt. And of course China is now said to be in the middle of a property bubble, and we all know where that ends.

So would it not be in the interest of everyone concerned to start forgiving some debt? After all, if Europe goes bust, it will impact the entire world. The UK will suffer, the USA will too, and more importantly China will have lost an awful lot of buyers for their mass produced rubbish, so its hardly in their interest either.

Am I being too simple? I know its not the thing to do to say to someone "sure that money you owe me, forget about it" but might it not be a case of biting off your nose to spite your face?

 

[z107]

Now I am no expert, and supposedly Europe/UK/USA owes a lot of money, so I am guessing it is to China? Is this right?

I don't know, but I'm guessing that the debt is owed to the citizens of Europe/UK/USA. People with savings, investments etc.

These people don't want debt forgiveness.

(I could be wrong though! - The whole thing is pretty confusing, probably deliberately so)

 

[darag]

Ultimately all debts are the savings of others.

If you really want to surrender your savings to support debt forgiveness, then you'll find plenty of desperate debtors who will gladly take your money. But I doubt such a voluntary debt forgiveness scheme would have much uptake.

So to pursue such a policy you are talking about forcing losses on savers (i.e. raiding deposit accounts and pensions savings). This has been done by some countries (particularly in Latin America) but the economic results have not been spectacular, to say the least.