Thread by @mors_lakota

On Chile and the refusal of loans as sanctions; Many people have heard that oft quoted line about Nixon wanting to make Chile's economy scream after the election of Salvador Allende, but I don't think most people know how that was actually done. Here is a short explanation.

The economic war against Chile had very little to do with directly sanctioning the country. Instead, the US would simply withdraw its aid and refuse loans at a staggering rate. Let's look at some numbers.

In 1970, before Allende's presidency, the Inter-American Development Bank provided Chile with $46 million in loans. During Allende's first year in power, the Bank loaned only $2 million to the country. Taking away $44 million does big damage to an economy. But there was worse.

In 1967, the US provided $260 million in economic aid to Chile. In 1972, the US would only give $7.4 million in aid.
Calculating for inflation, in 1967 Chile was given almost $2 billion in today's money, in 1972, $56 million.

That is an unimaginable amount of money to just be taken away from an economy. The US didn't even have to raise sanctions, all it had to do was take away aid and prevent loans. That's about $300 million dollars ($2.3 billion today) pulled out of the Chilean economy.

What happened once Pinochet took power? Well the opposite of course. Aids, loans, lines of credit, all of it opened up. In 1973, Pinochet received $48 million ($365 milllion today) for wheat and corn. Between 1974-76, he received $132 million ($1 billion) in Food for Peace grants

Kissinger gloated that Chile received 2/3 of the Latin American Food for Peace assistance while only being 3% of the regions population. Pinochet's Chile received $30 million ($228 million) for housing, compared to only $4 million for all other friendly Latin American nations.

Remember the Inter-American Development Bank? During Allende's 3 year presidency, the country received a total of $11 million ($83 million) in loans. During Pinochet's first 3 years, the country received 238 million ($1.8 billion) in loans.

The "economic miracle" of Chile that economists oh so love to cite had nothing to do with free market policies. It had to do with a massive amount of money being pumped into the Chilean economy by the United States, and the rise in the global market price of copper.

The withdrawal of loans and aid absolutely devastated the Chilean economy, and the reintroduction of loans and various sorts of aid is what brought it back to where it was before the US's economic war.

And even then, the economic policies put into place by the Junta and...

neo-liberal economists would destroy the country. It would take until 1987 for the country to reach the same GDP it had during 1971.

In short, sanctions are war crimes, aid withdrawal is war crimes, and the US is a disgusting entity that should be wiped off the face of the earth