The book Super Imperialism by Michael Hudson gets into this in depth with all the receipts. It was common practice in Europe that debts incurred by wartime allies were forgiven, so it was actually breaking with all precedent that the US demanded full repayment with interest from their allies, and the circular flow of payments from US banks to postwar Germany, to the European allies and back to the US is clearly documented and laid out by Hudson in his book. This is an arrangement that was intentional and beneficial to the United States at the expense of Europe, until it came crashing down when the financial bubble it created popped and the Great Depression resulted.
How can a take be “absurd regardless of its veracity”. Literally stating the truth is “absurd” if it reflects poorly on the United States? Do you find yourself overwhelmed living in such an absurd world (this one, where the United States is objectively a bad actor)?
The reason I say it’s absurd regardless of veracity is because it was not a valid geopolitical option. The US was still pursuing an isolationist foreign policy in the eyes of the public, it would have been political suicide to forgive those loans. The fact that we got involved at all was already shocking to Americans, if we then waived repayment it would have been a national outrage.
Also, I that I highly doubt that the US decision to demand repayment of the loans is notably outside of the bounds of normal international conduct. I haven’t read that book so I can’t say for sure, but I have a hunch that you’re making a false equivalency somewhere.
debts incurred by wartime allies were forgiven
Perhaps this is the reason, because the US was less of a wartime ally and more of a savior. The US was under absolutely no military threat, and thus viewing the loans as part of some kind of collective wartime struggle is quite the stretch.
The U.S wasn’t really implementing an isolationist policy, and never has since its inception. (Certainly not prior to WW1 when they had just finished going to war with Spain to take over its colonies, nor during nor after WW1 when they sent troops to a different Latin American country every single year to impose their will). It was just brutal realpolitik.
“Isolationism” vs free trade and free markets, the US government and ruling class just does whatever benefits itself the most. Hence, other countries need to open up their markets to US exports post WW1 but the U.S. will simultaneously levy protectionist tariffs so that European goods can’t be competitive in the US market. Germany had no recourse but to borrow more money from US banks to pay their reparations, so that UK can turn around and give that money back to the US government. The only other way for these governments to meet their payments to the US was to impose austerity and wring the money out of their own domestic population (which they also did, also a contributing factor to the turmoil which eventually led to another world war).
I don’t buy this “aw shucks we would love to forgive the debt or interest but we just can’t sell that to our domestic masses who care a lot about fiscal policy”. They did it because it directly benefited them (the ruling class and their state). They made massive profits off of the entire arrangement. Nothing mysterious about their motivations there. A better topic of discussion is would the European powers agreed to pay up, when that actually went against their own interests (look where it got them!)
The book Super Imperialism by Michael Hudson gets into this in depth with all the receipts. It was common practice in Europe that debts incurred by wartime allies were forgiven, so it was actually breaking with all precedent that the US demanded full repayment with interest from their allies, and the circular flow of payments from US banks to postwar Germany, to the European allies and back to the US is clearly documented and laid out by Hudson in his book. This is an arrangement that was intentional and beneficial to the United States at the expense of Europe, until it came crashing down when the financial bubble it created popped and the Great Depression resulted.
How can a take be “absurd regardless of its veracity”. Literally stating the truth is “absurd” if it reflects poorly on the United States? Do you find yourself overwhelmed living in such an absurd world (this one, where the United States is objectively a bad actor)?
“It can be cold, regardless of the temperature”
Thank you for providing a source.
The reason I say it’s absurd regardless of veracity is because it was not a valid geopolitical option. The US was still pursuing an isolationist foreign policy in the eyes of the public, it would have been political suicide to forgive those loans. The fact that we got involved at all was already shocking to Americans, if we then waived repayment it would have been a national outrage.
Also, I that I highly doubt that the US decision to demand repayment of the loans is notably outside of the bounds of normal international conduct. I haven’t read that book so I can’t say for sure, but I have a hunch that you’re making a false equivalency somewhere.
Perhaps this is the reason, because the US was less of a wartime ally and more of a savior. The US was under absolutely no military threat, and thus viewing the loans as part of some kind of collective wartime struggle is quite the stretch.
The U.S wasn’t really implementing an isolationist policy, and never has since its inception. (Certainly not prior to WW1 when they had just finished going to war with Spain to take over its colonies, nor during nor after WW1 when they sent troops to a different Latin American country every single year to impose their will). It was just brutal realpolitik.
“Isolationism” vs free trade and free markets, the US government and ruling class just does whatever benefits itself the most. Hence, other countries need to open up their markets to US exports post WW1 but the U.S. will simultaneously levy protectionist tariffs so that European goods can’t be competitive in the US market. Germany had no recourse but to borrow more money from US banks to pay their reparations, so that UK can turn around and give that money back to the US government. The only other way for these governments to meet their payments to the US was to impose austerity and wring the money out of their own domestic population (which they also did, also a contributing factor to the turmoil which eventually led to another world war).
I don’t buy this “aw shucks we would love to forgive the debt or interest but we just can’t sell that to our domestic masses who care a lot about fiscal policy”. They did it because it directly benefited them (the ruling class and their state). They made massive profits off of the entire arrangement. Nothing mysterious about their motivations there. A better topic of discussion is would the European powers agreed to pay up, when that actually went against their own interests (look where it got them!)