Unlike the US, Argentina can’t print US dollars. So unless investors invest $ into Argentina, or US and global consumers buy imports from Argentina and pay with US$, Argentina can’t earn $ to pay its $ debts. If investors in aggregate loaned $1trillion to Argentines at 10% interest, then Argentines in aggregate have to earn $100 billion in export earnings per year just to pay the annual interest. Each individual creditor may have only loaned $1million or $100 million to Argentines, which seems like a manageable debt, but in aggregate the total amount of $ loans is not manageable for Argentina.

In a free market system, when debtors go broke, creditors lose the money they loaned. Every debtor “promises” to repay, or the creditor wouldn’t lend them money in the first place. But in reality debtors default and creditors lose their money.

Rubio blames Argentine debtors for not having enough $ to repay their $ debts. But nobody forced creditors to lend $ to Argentines. The lenders took a risk, and the interest rates they charged on the loans made the risk look profitable. Lenders made a decision based on their risk/reward analysis.

In a free market, people make bad decisions and the market punishes them with losses. Too big to fail bankers lose trillions, and US taxpayers bail them out so the bank executives and bank shareholders are insulated against market punishments for their loser decisions. Now everybody expects the government to protect them against the free market, and bail them out so they never have to suffer losses for their bad decisions.

Debtors who have no money can’t pay their debts. Debtors who owe money in a foreign currency can’t repay the foreign money unless they have export earnings paid in that currency, or receive investment money paid in that currency. It’s not a political problem or a moral problem. It’s an arithmetic problem. You can’t repay money that you don’t have and can’t earn.