Source: Daily Bail
It is no secret that IMF head Christine Lagarde wants a massive increase in the size of the IMF's bailout fund. She's been lobbying publicly along those lines for the past month. What is new is the dollar figure now being floated. Keep in mind as you read this story that U.S. taxpayers contribute roughly 18% of all IMF funds, so the $3.5 trillion headline figure means $700 billion from the United States.
Any IMF funding increase would have to be approved by Congress, and judging by the blistering response below from Congresswoman Cathy McMorris Rogers (the leading U.S. anti-IMF advocate), it will not be an easy sell.
NOTE - In the excerpt below we have changed all figures to U.S. dollars.
Sources in Washington said the IMF’s pot of cash could be expanded to $3.5 trillion.
Christine Lagarde, the managing director of the IMF, said the current war chest of around $350 billion ‘pales in comparison with the potential financing needs of vulnerable countries’ and needs to be expanded to deal with ‘worst-case scenarios’.
Following crisis talks in Washington at the weekend, Mrs Lagarde said: ‘The Fund’s credibility, and hence effectiveness, rests on its perceived capacity to cope with worst-case scenarios. Our lending capacity looks comfortable today but pales in comparison with the potential financing needs of vulnerable countries and crisis bystanders. It will be useful to discuss, soon, the needs and contingency options.’
Now for some sanity on this issue:
U.S. Has Already Contributed $100 Billion + to Bailouts
“We Cannot Take the ‘Too Big to Fail’ Philosophy to a Global Level”
Washington, D.C. – Rep. Cathy McMorris Rodgers (R-WA), Vice Chair of the House Republican Conference, released the following statement today after International Monetary Fund (IMF) Director Christine Lagarde distributed a document at an IMF steering committee meeting warning that the IMF’s growing participation in European bailouts means the organization will likely need to increase its global bailout fund – a fund to which U.S. taxpayers have already contributed over $100 billion:
“At a time when the federal government is borrowing $5 billion every day on top of a $14 trillion national debt, we should not be funneling billions of dollars through the IMF to bail out Greece, Portugal, Ireland, and other European countries. The European Union was set up to be an economic competitor to the United States, and therefore, any bailout funds should come from the E.U., not the U.S.
The global debt crisis was caused by too much spending and borrowing and that crisis will not be solved by more spending and borrowing. We cannot take the ‘too big to fail’ philosophy to a global level. The only thing ‘too big to fail’ is America itself.”
The U.S. is the leading contributor to the IMF, providing the organization with 17.3 percent of its funding.
Video - Rep. Rogers on U.S. Taxpayer-Funded Euro Bailouts
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