Odious Debt
Categories: Credit, Ethics/Morals
"Odious" = "repulsive." Like, "you looked good in your Tinder profile, but in real life, you have an odious, puss-spewing growth on your upper lip...so we'll have to stick to hand stuff tonight."
As you've guessed by now, odious debt is repulsive debt, the puss-spewing type of borrowing. It has a highly specific connotation, though. It refers to money borrowed by a country and then misused by a regime that later gets deposed (because of its odiousness).
The argument goes that these debts shouldn't weigh on the new, less despotic regimes. It's a concept that comes up when discussing third-world debt.
Some dictator takes charge of Urlepestan, and borrows $2 billion from the World Bank to build a palace full of gold toilets and Rembrant paintings. Then he gets himself decapitated and disemboweled by an angry mob. Following his...er, removal from power...a democratic government takes over.
That $2 billion debt owed to the World Bank could be considered odious debt. Some economists would therefore argue that it would be in the best interest of the people of Urlepestan to forgive the debt...or at least the part of it that can't be repaid through liquidating the toilets and paintings.
