At the same time this way of funding has a significant impact on taxation. National tax legislation of the Member States typically allow an amount of deductible interest to be recognized as an expense for the company for tax purposes. As a result, the higher the level of debt and the amount of payable interest in a company, the lower will be its taxable profit. For this reason, debt is often a more tax efficient method of finance than equity.…
This central bank money manipulation has been a scheme with the consequences postponed for later. During this process, the Social Security 's retirement funds, pension 's funds and other equity funds have made it possible for governments to borrow money using these governments ' control of certain municipalities and countries as collateral to guarantee payment. How can a government who is insolvent guarantee payment to other institutions? These schemes have been growing and developing across the world.…
World Bank primarily loans money to countries that need short-term credit to shore-up their economies.…
Debt is one of the largest problems facing poor countries. The poorest countries in the world are in debt to the world's richest countries. The huge debt repayments are making it hard for these countries to develop. Ghana is one of these poor countries.…
Known as not only the president but the founder of TransAfrica organization, the organization that had an extreme impact on U.S. policies being enforced in the Caribbean and Africa, Randall Robinson, a Virginia Union University and Harvard Law School alumni, is a well known civil rights attorney in Boston, Massachusetts. Randall Robinson founded the TransAfrica organization in 1977. The TransAfrica organization one of the largest social justice groups in the United States aimed to achieve equal treatment for the people in Africa and the Caribbean. Robinson and the TransAfrica organization was against apartheid's. Robinson is known to have been a part of the anti-apartheid movement. He contributed to freeing Nelson Mandela. He also had a large contribution in the restoration of…
LEDC may then spend this money unwisely and then suddenly find that the loan that they had agreed on had a variable interest rate that had gone up since they started paying of the interest on the loan. They may find themselves unable to repay either the interest or the original sum. The country still needs to develop and therefore borrows more money to try and pay of their original debt and develop their country further. The LEDC then finds that it is locked in a debt trap. The country then only invests in projects that will it money and does not invest in long-term projects. This often leads to environmental damage such as deforestation.…
Bank of America Corp. and its main subsidiaries are among the institutions whose ratings fell at least one notch Tuesday, along with Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley and Wells Fargo & Co.…
America shouldn’t help help the poor in other countries. America should help the poor in it’s country. Who has helped us? America is poor. People don’t know much about America’s total wealth the only subject that they do know is the debt which I don’t…
The IMF acts as a bank to its 184 members offering loans to severely deprived countries, an example would be the IMF giving a loan to Indonesia where millions were facing extremely depleted food shortages. However, there are real strict conditions to the loan which the country has not choice but to adhere to, otherwise they don’t receive the loan. This loan is meant to help the countries get ‘back on their feet’ as it were, however but has sometimes leading to ‘serious recession’ in places like Indonesia.…
The role of the government in the lending of money should be to control the amount of money being given out to specific people. And also to assess the debtor if the person is able to pay back the amount being borrowed. The government shouldn’t be involved in lending of money if the money borrowed is not of great value. The government should just overshadow the parties incase both parties get out of…
Debt is made when one party owes party money (Oxfam, 2005). Just like people, governments of both developed and developing nations borrow money in order to function well and to maintain their economies (George, 1994). Debt is the economic mode that promotes economic activity in the global market (Lomborg, 2004). The acquisition of debt comes through loans, grants and aid that are provided to developed and developing nations by multilateral creditors and bilateral lenders (George, 1994). These creditors are international institutions such as the International Monetary Fund (IMF), the World Bank (WB) and other banking institutions (Millet & Toussaint, 2004). The international community with their neo-liberal approach and capitalist notions of eradicating poverty was through, economic growth and development (Schaeffer, 2009). Due to increased profits (petro-dollars) made off increased oil prices developing countries were encouraged and some even coerced to borrow money from developed nations in the 1960’s and 1970s (George, 1994). Although their profits were invested in Western banks it did not yield impressive returns thus encouraging the global South to acquire debt (George, 1994). The global South grasped the opportunity and borrowed money to advance their infrastructure (roads and dams) and also fund industrial projects in their countries (Jarman, 2006). Some countries even borrowed more money what they needed. So keen the developed nations were to borrow money that they disregarded any moral and ethical standards they might have had, and granted loans knowingly, to corrupt governments and military regimes (George, 1994).…
This research paper investigates the relevance of the dependence of Bangladesh economy on external public debt. Using some econometric tools, the study is conducted to find out the effect of external public debt on economic growth from the perspective of Bangladesh economy for the period 1974 - 2010. The study will probe debt overhang and crowding out effect of external public debt to represent the effect. To specify the debt overhang and crowding out effect of external public debt, the debt burden has been segmented into two part; external debt stock and external debt service. Long run significant negative effect of external public debt service and positive effect of external public debt stock on GDP growth have been found from this investigation. In short run, only external debt service has negative effect but the debt stock does not have any significant effect. Thus the investigation did not find any evidence of debt overhang provided that there is no significant adverse effect of debt stock on GDP growth. But crowding out effect was originated from the fact that there is evidence of adverse effect of debt service payment on economic growth for the period. As more debt stock means more service payment, the study shows a dichotomy in obtained results. So the reconciliation of debt should be prudent to optimize the growth of Bangladesh. Short run disequilibrium in the path of long run is corrected at a good speed. Keywords: Crowding out effect, cointegration, debt overhang, external public debt, error correction mechanism.…
Even the amount of $1456 billion is about 13 times larger than the country’s foreign debt. With this amount 45 crore poor people can get Rs. 100000 each. This huge amount has been appropriated from the people of India by exploiting and betraying them. Once this huge amount of black money and property comes back in India, the entire foreign debt can be repaid in 24 hours. After paying the entire foreign debt, the country will still have surplus amount, almost 12 times larger than the foreign debt. If this surplus amount is invested in earning interest, the amount of interest will be more than the annual budget of the Central…
Today’s world has been divided into developing and industrialised countries which the main difference between them is the amount of money that governments apply in important sectors such as education, health and commerce. Most of the poorer nations are buried in debts as a result of their unbalanced finances which are reflect in a failed health care, an unstructured education system and a weak international trade. This vicious cycle will continue indefinitely unless wealthier nations show interest in minimizing the worldwide economic differences, as well as taking more responsibility for assisting unfortunate countries.…
Almost every country in the world, while doing economic transformations, resorts to external sources of financing. Rational approach to foreign loans, credits and other types of help contributes into acceleration of economic development and solving social-economic problems. However the absence of complete integrated government policy in attracting and using external financial sources leads to formation of external debt which becomes a large barrier heading toward to economic transformations. Majority of developed countries, members of Paris club, are not only the largest creditors, but also greatest debtors. Starting from 17th century along with the development of government credit…