Private banking and government corruption saddle the 3rd world with debt – Richard Wolff


14 out of 15 of these countries (the
worst indebted countries in the world) on average cut their social spending for
their people by 13%. Here’s the point. If you get yourself into debt as a foreign
country, if you’re so desperate that you have to borrow in your society you will
regret it. Or, to be more accurate, the mass
of people will regret it because the government will have to raise taxes to
pay off the debt, and it’ll do that by cutting services, by cutting money for
schools, and hospitals, and roads, and all the rest. Now let me take it to the
next step. Here’s a statistic, the 30 countries with the lowest
amount of debt raised their public spending by 14% over the same
period. You couldn’t have it clearer. Go into to debt, you will hurt your people.
Keep out of debt, you will be able to help your people. So then why do third
world countries (in Asia, Africa, Latin America, and beyond), why do
they go into debt? And the answer is capitalist corruption. Let me explain.
The banks in New York, or London, or Paris have every interest in lending at high
rates of interest to governments in the third world. All you have to do is
convince (and that’s a polite word for “bribe”) local officials to cut a deal. You
can make it sweet for them by giving them a little extra under the table or
in a Swiss bank account, so those local officials sign an agreement. They take
out a loan that allows them to do all kinds of fun things for a year or two in
their country so they look real good and get elected. Meanwhile the country is
saddled with debt and that’ll be paid over the long run by cutting back on
social programs and using the money instead to pay off those bankers. As long
as you allow private banking and corrupt officials to get together and put a debt
on the mass of people you will see the tragedies we
have all around us.

35 Comments

  • Sounds exactly like the what the U.S. does to it's own Citizenry. And it's NOT b/c the county's in debt.

  • How about US corporations that fake their receipts to get away with not paying taxes in those countries

  • When you're the king of the hill sovereign debt is meaningless except as an excuse not to serve the people. The government can always issue more money for DOMESTIC spending with a few keystrokes on a computer. If foreigners don't want dollars for flatscreen tv's, there is an American entrepreneur that does. Inflation? In the best of times the dollar value has a half-life of 35 years because all dollars are issued against bonds with an interest rate.

  • This is what Taft called dollar diplomacy.

  • Can anyone advise me on where & how people get Statistics like this?

    Thanks 🎩

  • Our Fractional Reserve System creates "money" by debt and debt only. The scam is only the principal is created, not the interest. If you understand exponential growth then to pay back the debt with interest more money must be borrowed. We can end the corruption in the financial system (globalist bankers) by taking back our gold held in the Global Debt Facility and replacing the fiat currency with gold printed in a process called Aurum. Washington. DC is not a part of America but and independent City-State owned by globalist bankers, used for worldwide military power and funded the American people. America is awakening to this corruption. A journalist that dares, to tell the truth, will suffer the conscience of Assange. No one ever denied what he disclosed.

  • not really correct, technically they can devalue their currency and if other countries does that same, the debt pretty much disappear………but the people got wiped out, lol. Debt is already 330% of world GDP, Wolff. That is why countries around the world keep inflating their currency at certain percentage. All. There is a reason it's called "free money" / "free debt", but it still have effect on inflation. Hey Wolff, ever heard of Ponzi when you studied in Harvard?

  • Not sure why prof W. spotlights 3rd world countries, USA has a standing debt at more than 100% of its GDP plus it’s going up at 1 Trillion per year now. If foreign countries stop buying our debt, we are screwed. If our economy collapses the whole world takes a hit, that may put some pressure on them to keep us afloat but this path does not lead us all to a good place.

  • https://features.propublica.org/medical-debt/when-medical-debt-collectors-decide-who-gets-arrested-coffeyville-kansas/

  • You need to get used to that the rich need to update their seven bathrooms every few years.

  • Can you please do a video on Millennium Challenge Corporation? Nepal is falling into a MCC trap and people don't know much about it.

  • Social evolution has a cancer and it’s called the monetary system. Our entire economical paradigm is a threat to the ecological and social stability. Ditching the cruel system in favor of something new is no longer a matter of mere ideological preference but rather one of species wide existential necessity. THEZEITGEISTMOVEMENT.COM
    THEVENUSPROJECT.COM
    http://youtu.be/W2FPZrbYWK0
    Today we have access to highly advanced technologies. But our social and economic system has not kept up with our technological capabilities that could easily create a world of abundance, free of servitude and debt.

  • Prof Wolff, exactly correct. 1MDB, Malaysia's Sovereign Investmt Fund was formed by the former Prime Minister. Billions of dollars of bond borrowing was raised thru' Goldman Sach. The funds were embezzled by the former PM using Kleptocracy corruptions. As a result, the debt put tremendous pressure on Malaysia's economy. Private banking and corruptions saddled Msia with debts. Now, 1MDB scandal is the world's largest Kleptocracy scandal.

  • https://youtu.be/nEngOAzk0fM (on “The Panama papers” and Mossack Fonseca)

  • Capitalism loves workers & governments enslaved by debt. The best way of getting out of the debt trap is to stop spending on crap and use the cash to pay down debt. Get credit cards out of your wallets&purses !!!

  • Corps. like chase bank are supposed to be in handcuffs with their shady lending practices and astronomical interest rates with the malice intent of enslaving desperate homeowners and car owners.

  • Yeah, corruption is a big problem Puerto Rico has a debt bubble that keeps on growing no matter what but it's not with the international banks. It's with private investors that work in much the same way international banks work and with the backing of the US government.
    Greed is what drives neoliberalism and it's best weapon is ignorance.

  • And yet the US has $Trillions in debt…

  • The only way to fight a fractional reserve debt based system is to not loan money. It's as simple as that. Problem is they find all sorts of ways to persuade you to have something you don't actually need, and if you want to start a business and you don't have the capital, the only way to get it is through that damn sysytem. Heck, I've known this since 35 years ago. Capitalism opens the door for corruption. In fact, I think corruption is embedded in capitalism.

  • Privately own central banks, are the root causes of human misery and perpetual illegal wars.

  • Did the Prof read Confessions of an Economic Hitman by John Perkins?

  • Exactly. They engaged in illegal bribery to enslave those people.

  • Without interest countries wouldn't have much incentive to lend to LEDCs. I think more of the issue arises with the debtor rather than the creditor. If the debtor can not invest meaningfully and raise capital with this loan which exceeds total interest paid back to the creditor, then it simply should not take loans. And taking loans to service outstanding debt seems absurd to me. Yes, you are maintaining social projects and government spending, but what you're also doing is paying more interest, deteriorating your credit rating and as a result raising interest rates to an absurd amount, to the point where even if corruption was cracked down on and a new prosperous government wanted to raise funds for actual investments instead of buying electoral power, it would be stupidly difficult given the interest rate.

    Do developed economies know better to not lend money with high interest rates to poverty-stricken countries? Yes. Is it their responsibility to ensure the money credited is spent efficiently to ensure that the debtor will not be indebted? No. After all, these countries need funds to escape the poverty cycle, but in a perfect world where interests weren't high in countries where there was more risk involved, sufficient funds wouldn't be raised.

    I would also like to comment on the idea of creditors forgiving debt of indebted countries and why this is only a temporary solution. If we went with the idea that "these countries need this money more than we do" and forgive debt to allow these countries to spend money on investment in infrastructure and government spending, we're missing the bigger picture. In the future, because developed countries have experienced how their loans weren't repaid by LEDCs, they simply won't credit money to LEDCs. So these same countries which were forgiven debt will find it difficult to access foreign loans for future projects.

    Frankly, I don't know the solution to this problem, all I know is that when a new government succeeds the previous one with hopes to reform their economy and country, the number one focus should be on improving education. Better education results in a more aware general public who vote more consciously and reduce the need for governments to mismanage resources to ensure make-believe content public opinion. Although it is difficult to keep well-educated and talented youth in the country when countries like the US, Australia and Germany are offering scholarships and opportunities which are very much desirable and ultimately brain-draining countries. Countries like Iran, Nigeria and Mexico are some examples. I'm from Armenia and almost every student has aspirations of studying and working abroad to provide for their family. And the worrying part is that parents also further drive these aspirations by excessively encouraging them to get scholarships in these countries and to study abroad, without thinking about how these countries and their wages seduce them into staying and making a family there, leaving behind their struggling country.

  • Sounds like American Foreign Policy enabled by corrupt "Third World" officials.

  • Close your doors for the US-Jewish-banks and open your doors for the CHINESE COMMUNIST.

  • 1:14 "And the answer is: Capitalist ̶c̶o̶r̶r̶u̶p̶t̶i̶o̶n̶."

    Fixed it for ya.

  • Still waiting on a bitch to show up to knock his stupid ass the fuck out.

  • Corruption saddles the entire world. It's the human condition. Your one track mind tries endlessly to connect all of the evils of the world to capitalism. Capitalism corrupt, capitalism bad. Socialism not corrupt, socialism good. Capitalism exploitative, capitalism bad. Socialism not exploitative, socialism good. Capitalism militaristic, capitalism bad. Socialism not militaristic, socialism good. Let me remind you that socialism is every bit as corrupt, exploitative, and militaristic as capitalism. Those attributes don't depend on economic systems. Power corrupts, absolute power corrupts absolutely. You cannot name one socialist country that isn't or wasn't thoroughly corrupt, often barbaric like the USSR, and Communist China. The framers who engineered the US government fractured power into at least seven pieces limiting the power of any one of them and setting what they presumed could be equally corrupt and ambitions people against each other in what is politely called checks and balances. Separation of powers means fracturing power between the legislative, executive, and judicial branches. division of power means fracturing those three powers between the central government and the state governments. And watching over all of it was the press who were supposed to report the crimes of the other six. What they never imagined was that a group of extremely wealthy people could accumulate so much wealth and collaborate to corrupt the entire system for their benefit at the same time but it happened. That degree of corruption is built into socialism. That is its starting point.

  • United States republicans don't give a fu-€#+(&_ck about taking care of people, unless it's their own inbred cousin.

  • Yes the corruption and how it keeps all countries but especially smaller countries under the thumb of the world banking system and the powers of the US military complex and contractors is Heynis. The military set up posts in smaller countries and use it to exert control or go in after a war or an invasion for the countries are good of course and expedite billion dollar rebuilding contracts that benefit the contractors and not the local citizens by far. Also the illusion of free trade. All of this also ties into human trafficking as the very poor and or vulnerable/desperate are exploited. Gave this video a thumbs up. It needs millions if views.

    https://youtu.be/DnW9ZQtI1_E

  • ,
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  • Third world countries: Asia, Africa, Latin America and Canada.

  • Wow… I’m surprised Wolff has finally come to Christ and renounced debt and socialism. Even the most lost can be saved.

  • cool 😑

  • Trump appointed one of these criminals to his cabinet. Wilbur Ross made most of his money buying third world government debt for fractions of a penny on the dollar then using US diplomats to extort ransom and payments.

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