This House Believes That Sovereign Debt Default is a Legitimate Economic Strategy for All Countries


Let’s start with the ambiguous parameters that makes the wording of this motion questionable. What is the definition of “legitimate” and what are the parameters for something to belong to that category? Then, what are the actions that you would consider as a “strategy” or in fact an “economic strategy”?

About sovereign debt default, there should be no problem here. Expect both Team Affirmative and Team Negative to fully understand the definition and agree on its traits and characteristics. There might be a clash regarding ethical issues about it, though. But, then again, that is already to be expected, isn’t it?

Anyway, that’s about the whole direction we expect this debate to unfold, really. Ever heard of the economic ideal “mercantilism”? The fact that we don’t see any country blatantly exercising that belief anymore is due to how unethical it is. Sure, it is very beneficial, but very unethical. Almost like the equivalent of Machiavellian belief in its economics version. Erm.. go Google it.

The point is, it is now the onus on everyone (everyone, not only debaters, mind you) to find out which economic policy brings about profit, and also benefit, to all parties involved. Economic exchange nowadays should be about creating a win-win situation, not a zero-sum game (hence why lots of people oppose Forex) which is a win-lose situation. Beneficial for all, positive trade balance for both countries participating in a bilateral economic relationship..

Welp, that’s about it.

Team Affirmative

You don’t need to waste time proving how sovereign debt default will benefit debtors in terms of their economy. It is all too obvious. Heh, you borrowed $1M and now it’s defaulted with all compounded interests removed? Who doesn’t want such a lucrative deal like that?

Your biggest burden of proof is to convince how this is okay. And by okay, we mean ethical. Ethical for the creditors. Why ethical? Because trying to assert that this motion will be beneficial (economically!) for them is suicidal. Well, unless you’re YOLO-ing or you are a swing team.

Remember to also analyze other actors, because this motion will likely be the benchmark for future economic and trade deals. There are other potential debtors/investors/creditors out there, too, mind you.

  1. Because we don’t want creditors to act like loan sharks

If you are to reply to the question of “what do your parents do?” with an answer of “debt collector” or “creditor” or “money lender” or the likes of that, chances are people will look at you with a hostile look on their faces. The fact is that the connotation of these businesses being of usury is a common stereotype and mindset drilled within people’s minds already. Anyway, go Google (or just simply find out by asking for yourselves) the process of a debt collector collecting debts and to what extents they (usually) will be willing to go to. Although it is kind of an appeal-to-emotion type of argument which is a form of logical fallacy, you get the idea of how inhumane some collection process will be. Now the problem is that some governments tend to behave this way, inhumanely, when lending, assessing revaluation, and collecting debts.

Let’s analyze one aspect of this (you should try exploring and expanding this argument into other sectors available for analysis). Let’s skip the preliminary parts which include the banalities, debt becomes overdue, notification comes along, then two, then three, maybe four, then warnings, then comes the transfer from creditors to debt collection institutions, then the lawyers then the debt collectors come, then still no pay, then THIS! Following practices may involve placing levies on bank accounts or motor vehicles, garnishing wages, placing a lien on property or forcing the sale of an asset. And, that is the case for INDIVIDUAL debtors. Now we are talking about debtors who are COUNTRIES. What are the assets that a country might have which is appealing enough to impose a lien upon? All of your possible answers will ultimately come down to this: It threatens debtor countries’ sovereignty. That’s where you want to link back all your elaborations to.

  1. Because this is within ethicalities boundaries.

Now here comes the difficult part, but the most important part of the debate: trying to prove that this is indeed a legitimate economic strategy by proving that it is ethical. So let’s start with the checklist for all burdens for proof: what constitutes something as ethical and unethical?

Try setting up some parameters that will benefit you, but still realistic.

Discover other economic actions and policies of the like, and which ones would likely be classified as unethical and which ones would likely be classified as ethical.

Two extreme examples that would serve as good ones would be dumping and mercantilism. It is considered that dumping is unethical because it completely destroys the whole economy of the recipient country (of the dumping). Furthermore, it serves as a two pronged attack in which you perform a self-destruct attack on yourself with the intention of mutual destruction.

So, summarizing things up: it brings benefit to you, the 1st party, but at the cost of complete annihilation of the 2nd party, and also at the cost of some economic damages to you, too, the 1st party, because you “sacrifice” yourself on the path of destroying the 2nd party.

Mercantilism thought is judged as unethical, a system oriented toward the special interests of the mercantile class. It has also been judged as pre-scientific – arguments for a surplus on trade neglected the presumed equilibrating tendencies of trade. But the whole idea behind the unethicality of mercantilism is how self-centered it is, and how destructive it exuberates aura towards neighboring countries. The whole concept of “buy only raw materials, sell all finished goods – the bullions should belong in our territory only, leave no metal over there, all should be over here” can only be interpreted as having the mindsets of thieves in the hands of a country embracing mercantilism. A mercantilist country sees other countries as obstacles to destroy and overcome, not as allies and partners in business where both can profit at the same time. And the whole idea of “relocating assets”? It is just a subtle way of saying “wretched burglars”, mind you.

Therefore, unethicality can be inferred as stemming from a hostile attempt towards another country.

Well, that is our recommended setup. Then, try proving how defaulting debt is not a hostile attempt to jeopardize another country.

One, it is unlikely that a country borrows for the single intention to destroy another country. The fact that these countries are deep ship in debts and economic troubles means that “winning the competition” is among the least of their concerns. They have their eyes set on goals of only to survive for now, what makes one think that they will have thoughts of attacking and conquering others when they can’t even solve their own mess?

Anyway, you’ve got the point. Try elaborating the rest using examples and theorems of your own.

  1. Because we hope that creditors will now assess of proposals of debt more meticulously.

The onus of approving a debt is upon the creditors, not the debtors. A debt is a commodity, and as long as the commodity is not harmful (like narcotics and/or firearms, for example), or extremely scarce (like artifacts and/or relics), then the natural supply and demand shouldn’t be tampered with by officials. Now a debt is not harmful nor extremely scarce, so there shouldn’t be any control or banning coming from the government. And that is the way things are, as a matter of fact, in the status quo.

(Okay, we’re sorry. The fact is that this debt as a commodity CAN actually be harmful, it’s kind of debatable. Like alcohol, we should say – intoxicating and addictive then destructive in large numbers. But, anyway, that is not the whole point of what this debate motion should be about – just play the game of auto-concede then use even-if arguments the moment a clash surrounding this issue happens – or you’re expecting that it is about to happen.)

So, in a free market, and no matter the type of market – oligopoly, perfect competition, monopolistic – the consensus of both supply and demand is the name of the game. What Team Affirmative has in mind for the goal of this debate is a form of the suppliers being more meticulous in terms of taking care of business. Take insurance companies who do not perform proper background check on clients, for example. Granting subscription for patients who have poor medical records only to have their diabetes acting up and then going to hospital then comes all the claims will likely destroy the insurance companies themselves. Is it the fault of the clients? No, the clients just happen to be interested by the advertisement of the product of the insurance companies. It is always the onus on the supplier to take care of its products.

Anyway, well, you get the idea.

Team Negative

  1. Because this is not within ethicalities boundaries.

Now it is likely that Team Affirmative have set up a parameter of their own. What to do now? You may challenge the parameter with another parameter of your own, but remember all of our warnings about definitional challenges: this would belong to one of them too (even though the proper term for this will likely be coined as parameter challenge instead of definitional challenge). Or, you may follow the parameter introduced by Team Affirmative, accept it, and then prove the incoherence between that parameter and sovereign debt default.

And, as all our warnings have been, are, and will always be regarding definition challenges (and parameter challenges at this point): don’t do it. Anyway, assuming the parameter is like what was established on Team Affirmative Argument 2 (and you accept), then the onus on you is to prove that sovereign debt default violates the parameters that they impose on their own (and, tell you what, this is actually a sounder strategy, as battling under this parameter, and winning, means that you will have beaten Team Affirmative on their own game).

Yes, an action is a legitimate economic strategy when it satisfies the parameters of “not having the intention to destroy another”.

But, sovereign debt default has contained within, a vested interest in destroying.

What? How? Because out of all possible countries that could serve as potential creditors, we eventually have to choose one. What are the factors of us choosing France instead of Russia? Reasons could range from proximity, terms, likelihood of winning the negotiation game, etc. etc. But one of those reasons include the negotiation propensity to succumb. And countries who are more lenient or kinder will face more debtors looking to borrow from them. People then become tempted to pursue this kind of relationship with the weak. Because they will be the dominant, and the weak will be the submissive. And a relationship where a debtor country seeks less-dominant-and-more-submissive creditors, the more lenient countries, tend to be unhealthy. Parasites seek to destroy, so that they can move and find another host to infest.

Anyway, you get the idea.

  1. Because this will promote irresponsible borrowing.

The tone of argument in Team Negative Argument 1 is philosophical in nature, and this Team Negative Argument 2 will be your practical one. To fortify the elaborations from before.

Supposing that Team Affirmative wins this debate, not only in this debate chamber, but in general, and overall, not only the adjudicators in this room, but entirely virtually all average reasonable people all around the world becomes convinced  that sovereign debt default is indeed a legitimate economic strategy. Such a world would likely be more hellish than utopian.

When everybody gets convinced that defaulting is actually a legitimate action, failing countries will be less motivated to work their cracks off in order to solve the debt, and upon seeing a condition where there is no possible scenario in which they turn out absolving the debt, no matter how frugal their fiscal policy they changed to, no matter how much money they print, how much oil and gas they exhaust, and how much metal they mine, there is simply no way out: well that’s it. Just commit Sudoku.

If it is almost universally accepted that it is unfair for people to commit suicide even when there’s no way out around their debt, that they still have to fight for their lives and for their future no matter what the situation and condition, then the same treatment should also be applied on countries.

Explore more on the values of why we don’t want to provide this “surrender” button, that they have to play this economic game, no matter how gruesome they may feel, no matter what may happen.

  1. Because international stability will likely be jeopardized the moment when countries aggressively borrows.

Analyze the likelihood of international stability being deteriorated by this.. idea. Analyze from the two perspectives of the two main actors in this debate: the lenders and the borrowers.

Now supposing that the characterization of the borrowers is all too clear already, thanks to Team Negative Argument 1 and 2, let’s move on to the characterization of the lenders now. When this motion stands and prevails, and it becomes a common acceptance by everybody that debt defaults are to be expected, then we will have tighter measures by potential creditor countries (refer to the arguments established by Team Affirmative Argument 3, too, would you?). The question at hand now becomes, is this a good thing or a bad thing?

Consider the fact that currently we have austerity measures implemented by potential creditor countries. Take a look at the case of how Germany is the “sought savior” to end the chaos happening in Greece. Notice the fact that Greeks tend to be lazier in nature and Germans the more hardworking ones.

Sorry for the racist tone, but, well, it’s not totally wrong, you know (._.”)v

There was a time when it was possible for Germany to lend the money needed by Greece to solve the looming credit and deficit trade problems the whole economy issues, but under the circumstances that Greece follow extreme austerity measures. Now, here is the interesting part of this point. Lots of people dislike austerity measures, and you should, too.

For one, the fact is that if this motion stands, then all countries who previously imposed strong austerity measures will take their measures a mile further up. And what is the deal about these austerity measures being hated by many?

One, picture the whole upper-class societies suddenly mutating into middle-class, then the whole middle-class suddenly going to lower-class. I don’t want to even think about what’s going to happen next to those who are one step lower than them. Second, in times of economic crisis, the course of action, which one is more desirable, Keynesian or Austerity, is still debatable.

But what exactly happens when this austerity measures is implemented? No money gets printed. That means that the only source of income to pay for civil servants will be from taxes. The moment when taxes become the only source, it will going to substantially increase. So now your hamburgers and bus tickets are going to be more expensive. Which is actually okay, if you are a seller yourself, you know, because you can always increase the price of goods you sell, right? No. Increasing prices means that your potential customers and your current ones will find another competitor in the same business as you who are willing to “lose a little” in this monetary game but at the benefit of not losing any customers. So now you are less likely to increase your price, and will likely suffer. Now this is also bad news to the workers, who live on base and fixed salaries, because employers who can’t increase retail prices will not bother increasing their salaries.

The benefit is in the medium-to-long-run, when the number of producers from end who harvest agricultural products and farmers and fishermen produced enough supplies, either in terms of livestock, or food, or equipment, or machinery, or whatever it is, but at the same time the government doesn’t print any extra money, it means that now the value of money increases. This increased value of money will pay back creditors at a faster rate than before.

But the cost? Well, just imagine the angry faces of the citizens.