Do you favor debt forgiveness to all DVCs, just the poorest ones, or none at all?
♥ 0 |
Do you favor debt forgiveness to all DVCs, just the poorest ones, or none at all? What incentive problem might debt relief create? Would you be willing to pay $20 a year more in personal income taxes for debt forgiveness? How about $200? How about $2,000? LO28.5 |
Explanation
Sometimes, the forgiveness of the debt results positively. Debt forgiveness improves the poor and developing countries. If the poor countries' debt is forgiven, then the payment of the interest can be used in different sectors especially in human capital. Then the education system will develop. But before the forgiveness, the poor country has to show the relevant documents and plan for using the payment of the interest. The savings which stimulated the future growth and efficiency in borrowing will decrease after the forgiveness of the debt. The reckless spending of the countries will increase if they consider the loans as a gift.
$20 yearly is asked to provide for forgiveness of debt as a part of income tax. $10 to $16 billion yearly and $40 yearly per person is the foreign aid of Country U. Investing $20 as the direct foreign investment will be preferable as the income of $40 will cover up this payment. Investing $200 as the direct foreign investment will not be preferable as the income of $40 will not be covered up by this payment. Investing $2,000 as the direct foreign investment will not be preferable as the income of $40 will not be covered up by this payment.
Sample Response
The poor and developing countries will be improved by debt forgiveness. The payment of the interest can be used in different sectors, especially in human capital.
The forgiveness of the debt decreases the incentives of saving and efficient borrowing.
Investing $20 as the direct foreign investment will be preferred.
Investing $200 as the direct foreign investment will not be preferred.
Investing $2,000 as the direct foreign investment will not be preferred.
The Best Research Paper Writing Service
Would you want to pay someone to write your paper professionally from scratch? 100% Original and 0% AI Content!.