Stealth Move in Washington Aims to Get $100 Billion for IMF Without Congressional Debate
"You don't have to do this." Those are the near-last words of several victims in the Coen brothers' classic, "No Country for Old Men," as they try to convince the movie's unrelenting assassin that he should spare them. The assassin, played by Javier Bardem, finds this annoying, because in his mind these murders are pre-determined.
So it is with the IMF's continuing confrontations with its borrowers, with one government after another pleading: "You don't have to do this."
The IMF sees these measures as necessary and pre-determined - in most cases by the borrowing countries' having run-up unsustainable external or budget imbalances. But in fact the Fund has a long track record - dating back decades - of imposing unnecessary and often harmful conditions on borrowing countries.
In almost all of its standby arrangements negotiated over the last year, the IMF has included conditions that will reduce output and employment in situations where economies are already shrinking.
Yet here in
If we add up all of the IMF's commitments under 16 Standby Arrangements negotiated since the crisis intensified last year, the total is less than $46 billion. The poorest countries will not be allowed to borrow anywhere near that amount. The IMF already has $215 billion on hand, plus more than $100 billion in gold reserves. It plans to create another $250 billion in SDR's, i.e. the Fund's currency. Even if we include the $67.5 billion that
Yet the Obama administration, in a surprise move out of nowhere on Tuesday, decided to try and attach the $108 billion for the IMF to another spending bill in order to circumvent the normal legislative process. The reason for this stealth maneuver is that they might run into trouble in the House, where legislators are wary of voting for multi-billion blank checks after the backlash against the TARP financial bailout. They will try to convince Congress to approve this money without hearings or debate with the idea that it must be done in order to save poor people in poor countries.
Congress should be met with a chorus of opposition: "You don't have to do this."