We already have the evidence of the fraud perpetrated by Goldman Sachs in the Levine/Coburn report and to a lesser extent in the Financial Crisis Inquiry Commission (FCIC) report.
There are certainly some ugly ramifications for reneging on debt but if the bankruptcy of the TBTF banks cannot be (or won't be) undertaken, then it would be nice if Odious Debt could be put into place. If neither bankruptcy nor odious debt can be applied, then the banks will either receive their money through austerity that hurts vulnerable populations or through the use of rentier capitalism when the people are forced to sell public property to satisfy the banks' credit demands.
All the choices are ugly and made uglier by the fact that the banks caused the crisis initially, benefited from the crisis in a big way and will continue to benefit from the crisis until all the blood is squeezed from the stone.
What are odious debts?Read more about Odious Debts here
By Patricia Adams - Excerpt from The Doctrine of Odious Debts, Chapter 17 of the book Odious Debts: Loose Lending, Corruption, and the Third World's Environmental Legacy
"Odious" debts, incurred and used for ends which, to the knowledge of the creditors, are contrary to the interests of the nation, do not compromise the latter — in the case that the nation succeeds in getting rid of the government which incurs them — except to the extent that real advantages were obtained from these debts. The creditors have committed a hostile act with regard to the people; they can't therefore expect that a nation freed from a despotic power assume the "odious" debts, which are personal debts of that power.
Even when a despotic power is replaced by another, no less despotic or any more responsive to the will of the people, the "odious" debts of the eliminated power are not any less their personal debts and are not obligations for the new power....
One could also include in this category of debts the loans incurred by members of the government or by persons or groups associated with the government to serve interests manifestly personal — interests that are unrelated to the interests of the State.