Latin debtors balk at slashing budgets

''Why must our economic future be mortgaged to United States banks?'' asks Italo Argentino Luder, one of two front-runners in this month's presidential election.

Argentina's Mr. Luder is not alone. His question is being asked throughout Latin America as the region grapples with its whopping $300 billion debt. To many Latin Americans, it seems as if foreign bankers are running their countries' economies.

The leader of Brazil's opposition party says that adoption of the austerity measures demanded by the International Monetary Fund (IMF) would be tantamount to ''an abdication of national sovereignty.''

Ulysses Guimaraes, who heads the Brazilian Democratic Movement, goes further, complaining that ''decisions regarding the Brazilian economy are being made in closed meetings abroad, often without the presence of any Brazilian officials.''

This growing sense of frustration seems to be setting the stage for a possible clash between the lenders and the debtor nations. While slightly less than two-fifths of the $300 billion is owed to international lending institutions like the World Bank, the bulk is owed to private international banks, the majority of them in the US.

With Latin American loans forming a substantial part of loan portfolios in the biggest US banks, the bankers are pressuring those Latin nations to embrace a variety of austerity measures.

Together with the IMF, the bankers want their Latin American clients to slash public spending and adopt strict monetary policies - moves that, in the view of many Latin Americans like Mr. Luder, are certain to cause serious economic and social hardship on the peoples of the area.

While the bankers and the IMF are insistent on austerity, there is a growing outcry against repayment of the loans if it can only be achieved with budget slashing that may cause severe hardship.

That outcry is developing intensity in both Argentina, which has a $40 billion debt, and in Brazil, which owes $95 billion. Both countries' debts are largely owed to US banks.

Mr. Luder bristles at the idea of government austerity. Although his own financially strapped nation cannot even pay the interest on its debt, he says flatly: ''In no way will we meet the (loan) obligations of the nation with the hunger of the people.''

Other Latin Americans share his pique.

Argentine federal Judge Federico Pinto Kramer objected to loan contracts with US banks that gave jurisdiction, in cases of dispute, to New York State - and promptly halted all rescheduling negotiations 21/2 weeks ago. His ruling was overturned last week, but it was supported in many Argentine circles.

Buenos Aires's mass circulation morning tabloid Clarin complains that ''United States banks are dictating the hemisphere's economies,'' and asks: ''Isn't it time we did something about it?''

One Brazilian did something about it. He quit. Carlos Geraldo Langoni, the president of the nation's Central Bank, resigned last month after the IMF told Brazil that its budget deficit had to be slashed ''to zero'' and that inflation had to be brought down to 55 percent in 1984 - no matter the social cost. Those two measures, Mr. Langoni said, would plunge Brazil into unprecedented levels of recession and unemployment.

But the creditors, backed up by the IMF, nevertheless are pressuring for austerity. They are worried about their loans and reject the arguments that austerity will prove an intolerable burden on Latin American society. They point to Mexico. With an $80 billion foreign debt that last year it appeared unable to pay, Mexico accepted austerity - and began to meet its loan obligations.

The Mexican example, however, also can be used to try to prove that austerity is too stiff a price for a Latin American economy. In Mexico, austerity got off to a very shaky start. And once in place, there was no mistaking the high social cost. Unemployment has soared (to about 23.5 percent in late August, according to the government) while living standards have slipped markedly.

Moreover, the potential for broad social unrest in Mexico remains large. That is exactly what Mr. Luder and other Argentines want to avoid in their country - and what Brazilians like Mr. Guimaraes and Mr. Langoni want to avoid.

But without some austerity, it is unlikely Argentina or Brazil - or other Latin American debtors like Chile, Ecuador, Peru, Venezuela - will be able to garner enough money to repay their debts.

Even Argentines admit that without implementing austerity measures they cannot begin to pay off the $40 billion owed foreign lenders. In Argentina's case, a good chunk of the debt - maybe $12 billion - was incurred during and after the disastrous Falklands war last year.

In the final analysis, the foreign bankers say that austerity is the only acceptable road for the Latin American countries to travel. This, of course, is in the banks' own interest. After all, with sizable chunks of their loan portfolios tied up in the region, some of the banks would be close to default themselves if any of the Latin American countries were to default.