[dennisw]

Actually, there is little to negotiate. Iraq's new government will repudiate all debts contracted by Saddam, and no one on earth will make them pay if the US does not back their claim. The only way to force payment is to cut off future credit, not possible when they are an oil producer backed up by the US taxpayer.

Not a bad strategy for a special situation of Iraq. Will send a message to those who deal with scummy dictators that you might not get your loans paid when the nations rids itself of a murderous regime. I doubt the Russian commies ever paid off the Czar's debts.

Iraq will end up like a bankrupt who can't get a credit card but is great salesman, with great income, who must pay all bills cash on the barrel. Or with a debit card. The Iraqi secret is abundant oil reserves to trade with. Far different than if Zimbabwe repudiates it's debts after Mugabe is overthrown. At best Zimbabwe has fine tobacco and agricultural products to sell.

[Leisler]

I agree. Loaning to dictators and thugs should have a high degree of moral hazard. I mean, should a street corner crack gang leader get the same rate as a working home owner? Let them chase Saddam for the money.