Suchergebnisse

Biden claims that billions in loan forgiveness is "good for the economy," but his plans will end up costing taxpayers almost $500 billion.

Subsaharan African states clearly labor under an extraordinary weight of external debt. A strong groundswell of opinion has fonned behind debt forgiveness efforts. The plight of Africa's poor demands serious response from creditors and donors, not bo mention their own governments. yet the common economic arguments for debt relief find little empirical support in SSA. In particular, there is no evidence of debt overhang serving as a tax on investment or GDP growth. The real problem of external debt in SSA is the heavy marginal tax it levies on current account receipts. Surely this contributes to persistent balance-of-payments crises. The most important dimension of debt relief for SSA states is, thus, less stock reduction than release from the foreign exchange demands of repayment.

Not offering a program like this sooner. That's the only regret Dawn Medley has about the Warrior Way Back program she helped create at Wayne State University.

This paper proposes alternatives for governments to deal with the current pandemic crisis today. It suggests ways to deal with the increasing debt levels as a result of the fiscal stimulus issued to cushion the effects of a tremendous shock to the economy.Firstly, the paper proposes to protect the vulnerable group (based on debt-to-income ratio or its debt-servicing ability) through debt forgiveness and help SMEs through debt relief via debt restructuring for their outstanding loans. To finance this, we propose to convert the increased public debt from these initiatives into equity through a GDP-linked sukuk to stabilise a sovereign's debt to GDP ratio. The repayment on these sukuk will be in proportion to the country's GDP whereby the repayment automatically declines when growth is weak and increases when GDP is strong. In doing so, an anticipated deep recession caused by the global pandemic slowdown will makes it less likely to trigger a sovereign debt crisis. Secondly, such a strategy would provide the issuing government with economic reprieve when growth weakens and tax receipts decline. At the same time, investors can view these sukuk as an alternative asset class through exposure to the real economy, given the low interest rate environment. Both sides are incentivized by the debt-stabilising effects of issuance that would make sovereign defaults less likely and balance risk-taking.