Bring Back Latin American Debt!

Kevin Gallagher argues that the United States needs to make Latin American countries more indebted to it. Way, way, way more indebted, in fact, because since China is throwing tens of billions to the region, and therefore the U.S. should do as much or more than China.

For too long, the United States has relied on a rather imperial mechanism – just telling Latin America what it needs. Compare that with China’s approach: It offers Latin America what it wants (in the form of financing and trade from China)

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This just puzzles me. For many years the United States did what it could to shovel money to Latin America, which went further and further into debt. That did not happen because U.S. policy makers told presidents that is what they needed. It happened because corrupt presidents saw it as a way to keep clientelist structures in place without any apparent cost.

What the U.S. ultimately got in return was economic shock that produced conflicts which in turn led to the election of governments that were either wary or openly antagonistic to the United States.

If the U.S. were to start lending on a massive scale, this would not necessaraily happen again. But at the very least it should signal caution, and lending with the sole logic of keeping up with China seems the definition of throwing that caution to the wind.