An article by Rafael Delgado Elvir in Laprensa.hn objectively analyzes the tendency of governments to fall in debt when faced with economic slowdowns. Excess liquidity worldwide makes it very easy to issue bonds of any kind and for states to obtain direct loans.

Delgado points out that “governments capable of spending efficiently know how contradictory it is to defend limits to fiscal deficits or state debt while millions of citizens are out of a job, and thousands of factories go under or trim staff. In the long run it is more harmful to continue with the recipe than the disease itself”.

Delgado’s analysis should also include the role played by international financial organizations, like the Interamerican Development Bank or the Central American Bank for Economic Integration, whose employees make a living by continuously offering loans, far too often not earmarked for productive activities.

Source: laprensa.hn

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