VIENNA, SEPT. 3 -- Sen. Bill Bradley (D-N.J.) said today that Western nations must take the initiative in easing the debt burden for the developing world.

"Developing countries cannot pay their debt, {and also} invest to employ the next decade's workers and reform their repressive economic policies," Bradley said at a conference here on the international debt problem.

"Democracy is on trial in Latin America and the world," he said. "The question is whether the policies we follow will promote democracy and strengthen it, or weaken it."

The sentiment was echoed by Richard Huber, head of Latin American investment for Citibank, who said the situation of the debtor countries is no different than that of an individual who stops paying the mortgage and the car payments. Eventually, that person will be out on the street, he said, adding, "I'm afraid we are about to create a whole class of beggar nations."

Bradley, speaking to reporters afterward, said the debt problem is "inexorably" moving in the direction of greater forgiveness of obligations, simply because it is impossible for debtor nations to pay all they owe.

But he said that the United States was not moving swiftly enough to help the process. "My regret is that the U.S. administration has not seized the initiative so that the political benefits go to the United States," he said.

He also said there is a "new player in the game" -- the Soviet Union -- which he said may try to exploit Third World resentment of debt burdens for its own political ends. He suggested that the Soviets eventually might offer easier financing to struggling countries.

Jeffrey Sachs, a Harvard University finance professor who said he often is asked to advise debt-ridden governments, said he stresses that they not alienate their own people with radical belt-tightening.

That would result in a nationalistic backlash that would remove "reasonable, responsible democratic governments" from power, he said.

"In current real world circumstances, what we're talking about is remarkable austerity for the sake of paying off bad debts which were lent by commercial banks on commercial terms to military governments," Sachs said.

"It is simply impossible for the new democracies in Argentina, Bolivia, Brazil, Peru, Uruguay and the rest of Latin America and Central America to do this," he said.

"So we have to give, and that's the way that these countries will stay in the game," said Sachs.