Word: defaulting
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...control. Moreover, he argues, to draw any shocked or outraged response from an increasingly desensitized public requires "more and more chilling demonstrations" of the horror of nuclear war. But paradoxically people simply grow desensitized to the demonstrations. This most vicious of vicious circles creates a kind of consensus by default for the bellicose plans of "thinkables" in the Pentagon and the Kremlin...
Washington, meanwhile, is taking a wait-and-see attitude. The Reagan Administration last month kept the Poles out of default by paying $71 million in gram-export loans that Warsaw owed to U.S. banks. That sum, however, is dwarfed by the $1.7 billion that American banks have loaned Poland, and the $ 1.9 billion of total direct Government lending. Administration officials believe that the best Western position is to continue holding out the threat of default without actually using it. Said the President at his press conference last week: "Default will make Poland more dependent on the Soviet Union...
...allies applaud a policy of restraint. Said West German Minister of Economics Count Otto Lambsdorff in New York last week: "I feel it has been a wise and helpful decision not to officially declare a Polish default...
Academic experts warn that one of the first consequences of such action would be to reduce the little leverage that the West has on Warsaw and Moscow. Says Edward Hewett of the Brookings Institution: "A default would prompt the loss of what influence we have." The move would also hurt the reputation of Western bankers. Adds a European banking authority: "A Western declaration of default would make the Soviets chuckle. The Russians would be able to discredit the West, particularly in the Third World, where such action would be regarded as callous capitalism...
...problems. Its own economy is weak because of repeated bad harvests, and it has been forced into a cash squeeze to buy grain. Moscow has sold gold heavily on world markets to raise money during the past six months. Even without the risky step of declaring Poland in default, Western banks and governments can still exercise great financial influence over the Communist world. -By John Greenwald. Reported by Richard Homik/Warsaw and Bruce van Voorst/New York