Hullabaloo

Thursday, June 11, 2009

 
IMF Bailout 101

by digby

Here's a useful explanation from Ohio Senate candidate Jennifer Brunner about why the House should reject the administration's request for a bailout for the IMF in the emergency supplemental.

COLUMBUS -- Ohio Secretary of State Jennifer Brunner today called on the U.S. Senate to reject the Obama Administration’s request for $108 billion in bailout funds for the International Monetary Fund (IMF).

“Many of the European banks made a series of risky and speculative loans in central and eastern Europe that are likely to go into default,” Brunner said. “We are looking conservatively at more than a trillion dollars in bad loans, loans that the United States had no part in, and we simply cannot afford to step in now and bail them out through the IMF. “ We have too many families and our own institutions struggling here at home who need our help first.”

Some have argued that the money is necessary to help provide a global stimulus and to help people in poverty in countries with poorer and less sophisticated economies. But the actual amount of money that will go to assist these countries is indirect and minute. Most of the money would aid struggling European banks that are facing potential losses in the hundreds of billions of dollars. That money would be sent via the IMF, which, unlike TARP funds, would not be subject to any semblance of oversight of or accountability to the U.S. Congress.

“American taxpayers are weary of business bailouts, especially ones that do not help create American jobs,” Brunner added. “And as we speak, some American banks are chafing at the regulations placed on them by the latest in bailout funding and want to repay it quickly to have a say in their own operation and to attract the best talent to their operations. Bailing out European banks through the IMF, without even the minimal regulations placed on American banks, only increases the potential for a wider imbalance in trade, giving away American wealth and self-sufficiency, and jeopardizing not only our economy but our traditional sense of American self-determination. Before aiding foreign banks, Congress must demand a thorough auditing of the Federal Reserve by the Government Accounting Office. We must protect our American tax dollars and ultimately the wealth of our country for now and for future generations. No bailouts without transparency and accountability,” stated Brunner.

The fiscal scolds are multiplying like rabbits in Washington this spring with even the president giving sonorous lectures about budgetary restraint and sacrifice. Fine. But if that's the case then these bailouts are done. They can't have it both ways and give away billions upon billions to wealthy gamblers all over the planet and then come and lecture average Americans about how they have to pull in their belts and learn to live within their means. Sorry, it just doesn't scan.

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digby 6/11/2009 11:30:00 AM |