Last year, the Senate voted to give $108 billion of your tax dollars to the International Monetary Fund (IMF). The IMF is now pledging to “loan” $39 billion as part of a $145 billion bailout package to Greece. This is all happening as the Senate debates and amends the S.3217 the “Restoring American Financial Stability Act of 2010,” in an effort to protect the economy from a repeat of the economic meltdown of 2008. As the President and Congress pledge to protect taxpayers from bailing out Wall Street firms, U.S. taxpayer monies are being used to bailout the terrible fiscal decisions of Greece.
J.D Foster, a coworker of mine at The Heritage Foundation, authored a blog post titled “No US Taxpayer Dollars for Greek Bailouts” where he argues:
It was bad enough when the federal government bailed out AIG, and then Fannie Mae and Freddie Mac, and then many of the mega banks, and then GM and Chrysler. At least these had the modest merit of being US companies with US workers. Even if US government finances were in pristine shape, US taxpayer dollars should not be used to bail out a perennially dysfunctional state. But as spending-driven trillion dollar budget deficits and a Presidential debt commission starkly evidence, the US is seriously risking its own Greek-style sovereign debt crisis. Fortunately, the US doesn’t need an IMF bailout. It only needs a President willing to acknowledge that he has led the country on a Grecian spending binge it cannot afford.
The case for loaning money to Greece is weak, because there is no reasonable expectation that they can right the ship and pay off this loan commitment. How did they get there? More from J.D. Foster
Greece is in a financial death spiral brought on by years of amazingly irresponsible deficit spending and similar behaviors often found in socialist states to the detriment of their economies. Greece also abandoned its national currency in favor of the Euro, in hindsight at least a stunningly bad move which for the EU makes this a major financial crisis and an embarrassment of the first order. What makes these otherwise somewhat removed events of immediate concern to the United States is that the IMF intends to use US taxpayer dollars to try to stave off Grecian disaster.
At this moment, riot police are deployed in Athens, Greece to put down an insurrection that has caused a massive loss of weath on Wall Street. According to CNBC, the DOW plunged more than 900 points:
The Dow plunged Thursday amid buzz in the market that European banks have halted lending. One trader, on the condition of anonymity, said he heard fixed income desks in Europe shut down early because there was no liquidity — basically European banks are halting lending right now.” This is similar to what took place pre-Lehman Brothers,” the trader said. The Dow was down more than 900 points at one point, or more than 8 percent, before pulling back to the 600-700 point range.
The United States has it’s own problems with high unemployment and slow economic growth. Americans were upset about bailing out American business decisions that turned out risky, yet when they will become even more enraged when they understand that they, the taxpayers, are loaning billions to a foreign government that made terrible fiscal decisions.
At least 64 Senators are kicking themselves today for voting last year against a DeMint Amendment that would have blocked $108 billion in emergency monies to the IMF. Now that money is being used as part of the Greece bailout package.
The Heritage Foundation just published another piece by Sally McNamara and J.D. Foster titled, “5 Reasons Not to Support a Bailout of Greece.”
No sooner had news of Greece’s bailout been announced that rumors began that Spain may be seeking up to €280 billion in aid. Spotting an electoral opportunity, the leader of Germany’s main opposition party, Frank-Walter Steinmeier, has so far refused to pledge parliamentary support for the bailout package. He is correct that this is unlikely to be the last transfer of taxpayers’ money from Germany to Club Med. It is also extremely unlikely that Greece has the political capacity to take forward the reforms to which it has committed in exchange for the rescue package. The sooner the Eurozone faces up to the financial costs of the single European currency, the better.
Is Spain next in line for an IMF Bailout partially funded by you, the American taxpayer?