ScarletRose:

> well the US never collected on all the War Loans (WWI, WWII) we loaned out.. heck wonder what the interest would be??

I think that this is true in part, but not entirely true. It wa smore complex that merely giving loans. One has to study the Marshall Plan to understand what happenend.

http://en.wikipedia.org/wiki/Marshall_plan#Repayment

The conventional wisdom is that Western Europe had to be rebuilt in order to stop the spread of communism. People were poor and hungry, and the help was needed to revive the economies and avoid local population from going into revolution in favor of the communist parties.

In reality there were not just loans but grants and loans. Most of the money was given as grants which were used to buy manufactured goods to supply the population, and invested to stimulate the local economies.

In some countries like Belgium the grants were essential in the recovery. In other countries the recovery had started even before the grants were given out in 1948 (for example, Germany and France) . However, American and Canadian banks and manufacturers made billions in profits because Europeans took those grants and bought from those countries which had economies left intact after the war. That was the USA and Canada. So Americans and Canadians gave grants, and in turn made billions in profits.

At this point we must note that the Soviet Union and the Eastern Bloc countries received no help under the Marshall Plan, and the Soviet Union had to fully repay money borrowed or owed during WWII. The effect was to prop western economies while forcing the Soviet economy to collapse.

The grants also included provisions to ensure that European countries would accept the presence of American military bases (including nuclear weapons) in their countries. The grants also forced the economies to adopt a pro-capitalist economic model and government system. The way in which these grants were applied became a model on which the Wolrd Bank and International Monetary Fund would operate later. Those international lenders lend money only if governments adopt policies that favor big western corporations and western military interests.

The loans and grants were not something given as a gesture of friendship and good will, but as a calculated political manouver aimed at stopping communism and attaining political and military influence. Most of the money returned to the USA and Canada as manufacuturing profits. Considering the end result more money was made than was given out.