How the IMF loan-sharks the global south

With surcharges, the cruelty is the point.

When you take out a loan or get a credit card, the headline figure is the “APR” — the annual percentage rate of interest. But anyone who’s ever borrowed because they were poor and needed money has learned the hard way that APRs are pure fiction.

To get the true APR (what economists politely call the “effective” APR) you have to factor in the fees, penalties and other gotchas that turn reasonable seeming interest rates into perennial, inescapable debt-traps.

Take student debt. During the 2020 presidential campaign, we had a debate about student debt forgiveness, whose opponents frequently cited the “unfairness” of allowing people to “escape their responsibilities.”

https://pluralistic.net/2020/12/04/kawaski-trawick/#strike-debt

In their telling, student debt forgiveness would reward fecklessness, allowing people who got the benefit of an expensive education to duck the costs.

Now, even if you ignore the farcical inflation in university tuition and expenses (for example, the 1000%+ hike in textbooks driven by ed-tech monopolists), that’s still a highly selective account of how student debt works.