Exactly one year ago the promise of major debt relief in yet another Third World debt plan was fresh and, briefly, credible. Euphoria seized the capitals of debtor nations, overshadowing the long-running gloom of the debt crisis. Today the promise of that plan, named for Treasury Secretary Nicholas F. Brady, has evaporated even before half the troubled debtors have completed negotiations under its umbrella.
Like the Baker Plan before it, the Brady Plan has fallen victim to the hard realities of skeptical bankers and wayward debtor nations. This leaves the outlook for most debtor countries bleaker than ever. And American and other industrial-world taxpayers are on the hook for an even greater share of the bad loans should the house of cards that is propping up the corrupt socialist economies of the big debtors finally collapse.
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