2006-07-21 21:41:44 · 4 answers · asked by yuki_18 1 in Politics & Government ➔ Government
The advantage of foreign debt is that it (theorically) allows governments to increase economic growth beyond its own ability and to finance crucial projects should cash flow be tight. The disadvantages are interest charges and political and economic dependence.
2006-07-21 23:52:41 · answer #1 · answered by puppy 3 · 2⤊ 0⤋
One advantage to foreign debts is that it makes the ruler of whatever country is receiving aid remarkably rich. In the right hands, this aid can go to the millions of starving people and better life for all of them.
However, the disadvantage to this is that it ties the country receiving money to the country loaning it, so that the loaner can take their pick of whatever valuables the other country has.
For example, say Panama's got a foreign debt to the US. If in the right hands, Panama's people are happy and wellfed. If not, Panama's leader is happy and wellfed.
Whichever way you go, the US now has control of the Panama Canal, since that's their most valuable resource. The US makes a ton of money from this deal.
2006-07-22 14:35:45 · answer #2 · answered by Pendergast 2 · 0⤊ 0⤋
you mean 'advantages and disadvantages'....well, one DISadvantage is that every year our government goes further in debt,the more taxes we americans pay to foreign countries. Do you like paying taxes to countries like saudi arabia? I don't....
2006-07-21 21:43:57 · answer #3 · answered by gokart121 6 · 0⤊ 0⤋
It's good to have foreign investors in USA. More money to help pay our debt.
2006-07-25 10:59:51 · answer #4 · answered by CottonPatch 7 · 0⤊ 0⤋