On December 12, 2008, Rafael Correa the new president of Ecuador announced on television that he had decided to cancel the Ecuadorian national debt of around $11billion, considering it illegal and in violation of the constitution. The IMF (International Monetary Fund) reacted by isolating Ecuador but several other South American countries came to their aid announcing food aid and an interest free loan to Ecuador to aid in their recovery.
Two days later, Ecuador denounced the United Fruit Company and Del Monte and Associates, nationalizing their assets, principally banana plantations. On December 20, a week or so later, still President Bush (Obama had been elected but did not take office until January) reacted, denouncing the ‘criminal decision’ and said the US was even ready for a ‘military option to safeguard US interests.’ The next morning a New York law firm intervened on Ecuador’s behalf citing a recent precedent in support of Ecuador’s actions.
The precedent was dated January 4, 2003 and absolved the 250 billion Iraqi debt left by Saddam Hussein. Iraq was a US possession at the time, occupied by the US military after Saddam’s ousting without a recognized provisional government yet in place. Saddam’s debt was called an immoral debt and was dissolved and guess who signed the document. Yup, non other than President Bush. The law firm offered Bush’s administration two options – stand down and accept the Ecuadorian decisions or cancel the immoral debt agreement and immediately repay the 250 billion from the US treasury. The Americans stood down.
On August 3, 2012 Ecuador made it official, legally applying the concepts of an immoral debt to their decision made nearly four years earlier. This concept is soon to have far reaching consequences as it can be applied to virtually all national debt including the US’s 17 trillion and counting. A hundred years ago, a group of private bankers put together an agreement that was signed by US President Wilson to borrow interest bearing funding from the privately owned Federal Reserve bank instead of printing the needed money, interest free, as was constitutionally enshrined. Does this sound moral? Canada’s national debt has similar underpinnings. The debt for WWII was financed by the Bank of Canada as was the building of the St. Lawrence Seaway and because the Bank of Canada was owned by the government, these debts carried no interest. In the 60’s and 70’s, this changed and the Canadian government began to borrow from private banks that charged interest and paid the interest charges with taxpayer’s money. Sounds immoral don’t you think?
The Saddam brand of debt based immorality is rampant in the so called third world countries where heads of government are encouraged to take on loans from private banks and build up national debts, all carrying interest charges payable by the people of their country to foreign banks. There is no moral grounds for these debts and they will all soon be forgiven.
Freedom for humanity…