The scheme rewards these smug kleptocrats (and the bankers who helped them) for pilfering most of that money to support their own lavish lifestyles while leaving their nations more impoverished and more poorly developed than they were 35 years ago.

In an ironic and probably unintentional echo of the Franklin Roosevelt policies which extended America’s own Great Depression by a full decade, British Treasury chief Gordon Brown called the bailout a “new deal between the rich and poor of the world.”

If only it were so.

Leaving aside the fact that the central government in Washington has no constitutional authorization whatever to commit $1.3 billion to $1.75 billion in U.S. taxpayer funds to this bailout for rich international bankers, the plan might make some sense if the corrupt Third World governments in question were now declared “in default” and all future loans cut off.

But no: The Brits will continue at the group’s next meeting -- July 6-8 at Gleneagles, Scotland -- to lobby U.S. negotiators to stop dragging their feet and finally agree to a British proposal to now loan these same Third World incompetents (it’s either that or call them “thieves”) an extra $50 billion per year, above and beyond the credit line they’ve already been running.

The deal announced Saturday would allow officials in 18 bankrupt countries -- many of them in sub-Saharan Africa -- to simply write off $40 billion they currently owe the World Bank, the International Monetary Fund and the African Development Bank. Twenty more countries might see an additional $15 billion in debt “forgiven” if they’re willing to sign some papers promising to be less corrupt.

The real problem is that this does nothing to cure Africa’s underlying economic ills. As the World Bank conceded in 2000, the nations of Ghana and South Korea were at virtually identical levels of economic development in 1965. But over the next 30 years, Korea’s exports grew by a factor of 400, while Ghana’s increased by only a factor of four, and real earnings per capita in Ghana “fell to a fraction of their earlier value.”

Why? Because the kind of ruling political elites that are kept in power by these big World Bank and IMF loans “have misused the economic surplus generated by the African continent over the last 40 years,” explains Moeletsi Mbeki, deputy chairman of the South African Institute of International Affairs, a university think tank. They used that wealth to “bolster their standard of living to Western levels,” to engage in “loss-making industrialization projects” not supported by proper technical and educational development, and by “transferring vast amounts of money ... to overseas private bank accounts, while borrowing vast amounts from developed countries.”

OK, expecting African peasants to pay off these huge sums is absurd and possibly even counterproductive. But the fat cat bankers who made these hopeless loans can’t even settle for 60 cents on the dollar? And why does the responsibility fall to Joe and Jane Taxpayer in Laramie or Leeds, who never OK’d the loans, let alone got a commission or a promotion out of them?

Anyway, debt forgiveness makes sense only as part of a package designed to end the domination of these Third World economies by corrupt bureaucracies. What sub-Saharan Africa needs are “new financial institutions that are independent of the political elite” -- credit unions and savings banks small enough to deal with individuals and small businesses, Mr. Mbeki advised in an April foreign policy briefing for the Cato Institute.

In fact, as Marian Tupy, assistant director of the Cato Institute’s Project on Global Economic Liberty, proposed during President Bush’s visit to Africa two years ago, debt cancellation should be embraced not just to “decrease the overall level of African debt” but also to “rationalize future lending -- more circumspection on the part of the creditors in the future will help keep funds from African dictators.”

In her own 2003 prescription, Ms. Tupy proposed: “One, the United States should withdraw from the International Monetary Fund. The IMF often serves as a benefactor to corrupt and inept regimes, which engage in gross macroeconomic mismanagement. Were it not for the IMF and other official lenders, economically incompetent governments would be forced to seek loans under normal free market conditions. ... Higher interest rates would thus stimulate governmental circumspection in borrowing and expenditure.

“Two, the United States should withdraw from the World Bank. The World Bank’s ‘aid’ to Africa has had disastrous consequences for the continent. Far from being used for infrastructure and health care, the World Bank’s money enriched Africa’s dictators and provided them with the means to oppress their people. The money that was not embezzled was misspent. According to the Meltzer Commission, the failure rate of the Bank’s African programs in 2000 was 73 percent.”

Then, “The United States should emphasize the benefits of free trade,” Ms. Tupy continued. “According to the Cato Institute’s recently released 2003 ‘Economic Freedom of the World’ report, Africa possesses some of the world’s most economically unfree nations.”

And finally, “The United States should live up to its words and embrace free trade by enabling African farmers to enjoy unrestricted access to American markets,” Ms. Tupy recommended. (Hint: Check the peanut quotas.) “The United States should end its farm subsidies and leave the European Union as the only major agricultural protectionist in the world.”

That’s what the leading economy of the free world could and should do to help Africa. Instead, last week’s deal to pile all this debt on the shoulders of American and European and Japanese taxpayers only encourages the kleptocrats and their World Bank facilitators to launch another huge wave of waste and theft.

U.S. negotiators should stick to their guns, and turn off the tap. It’s time to send in the entrepreneurs.