The IMF wants to Double their Resources to Bail Out the Eurozone

Posted by PITHOCRATES - December 25th, 2011

Week in Review

The IMF wants more of our money.  So they can help governments maintain their irresponsible ways (see IMF urges members to boost funding under 2010 plan by Lesley Wroughton posted 12/22/2011 on Reuters).

IMF chief Christine Lagarde on Thursday urged member countries to quickly sign off on an agreement last year to double IMF resources and give under-represented nations, such as China, greater voting power in the global lender.

The changes to members’ quotas, which determine how much each country contributes to the IMF and their voting shares, are critical as a euro zone debt crisis escalates and is set to slow global growth in 2012…

As of December 12, just 53 countries, holding 36 percent of total IMF quotas, had approved the increases. Approval by members holding about 70 percent of quotas is needed to implement the changes. Some countries require their legislatures to authorize the changes.

The measure still requires approval by the U.S. Congress, where Republicans are taking aim at any IMF move to bail out troubled euro zone countries, saying they don’t want American funds involved.

IMF resources?  You know what that means.  More of our money.  So they can give it to other people.  Like those in the Eurozone.  Where they won’t cut back on their government spending and live within their means.  Instead they want us to cut back on our spending.  So we can give them our tax dollars.

With only about half the votes they need to increase their spending (and our taxation), it doesn’t look good for the IMF right now.  You see, the problem is that it’s just not one country in need of assistance.  Right now governments all around the world are living beyond their means.  Even the United States has entered the fraternity of nations who irresponsibly live beyond their means.  Which makes it difficult to help pay for other nations.  Because we’ll just push ourselves closer to where they are now.  And once we do who will be there to bail out us?

Keynesian economists say no big deal.  Just print more money.  Which is what central banks are for.  But it was those central banks that created the crisis in the Eurozone in the first place.  And doing more of what gave you a problem is not likely to solve that problem.  No matter what the Keynesians say.

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