Amer­i­can tax­pay­ers about to bail out Greece

The Washington Times Weekly - - Commentary -

When the pres­i­dent and the speaker of the House re­cently reached into tax­payer pock­ets for a tril­lion-dol­lar wealth-re­dis­tri­bu­tion ex­er­cise un­der the guise of con­tain­ing our health care costs, at least the re­cip­i­ents were, by and large, fel­low Amer­i­cans. As an en­core, within the next month, bil­lions of U.S. tax dol­lars will be spent plug­ging bud­get holes within the Euro­pean Union’s core eu­ro­zone. Ev­i­dently with Nancy and Barack’s bless­ing.

I am, of course, writ­ing about the In­ter­na­tional Mon­e­tary Fund’s (IMF) re­cent com­mit­ment to par­tic­i­pate in the in­evitable bailout of Greek na­tional debt. The ini­tial tab is $50 bil­lion, and con­sen­sus is that this is just for triage and the pa­tient ul­ti­mately will re­quire much more. With the United States hav­ing the largest IMF quota, it is the largest donor coun­try. While this un­fold­ing story is get­ting daily me­dia at­ten­tion in Europe, in­clud­ing heads of state speak­ing out, Pres­i­dent Obama and Speaker Nancy Pelosi seem to have de­cided just to let it hap­pen. Ex­cept for spe­cialty fi­nan­cial me­dia, it seems as if the me­dia also is giv­ing a free pass to this story.

What is most galling is that the EU openly de­clares it has the money to han­dle this bailout in­ter­nally within the eu­ro­zone. It’s just that it prefers to use other peo­ple’s money, and the IMF is ready to de­liver un­der its di­rec­tor, Do­minique StraussKah­n, a ca­reer French govern­ment bu­reau­crat. Plug­ging bud­get holes in the eu­ro­zone (an eco­nomic su­per­power) hardly is in line with the IMF’s in­tended role of back­stop­ping Third World coun­tries dur­ing times of cri­sis in re­turn for struc­tural free-mar­ket re­forms. But Mr. Obama and Mrs. Pelosi seem happy to let even U.S. tax­payer dol­lars flow for this pur­pose.

Let’s take a closer look. As re­cently as Jan­uary, France’s po­si­tion, pumped up by its le­gendary pride, was that the eu­ro­zone has more than enough re­sources to man­age this in­ter­nal prob­lem and that the EU would no more con­sider ask­ing IMF par­tic­i­pa­tion to bail out Greece than the U.S. would con­sider ask­ing IMF sup­port to bail out Cal­i­for­nia. The eu­ro­zone plan was to have mem­ber coun­tries pro­por­tion­ately pool nec­es­sary funds, which meant Ger­many and France would carry the heav­i­est bur­den.

But then the Ger­man equiv­a­lent of the Tea Party move­ment re­volted against us­ing Ger­man tax­payer money to bail out the Greeks, whose prob­lems ob­vi­ously are self-in­flicted through a decade-plus orgy of spend­ing and fla­grant vi­o­la­tion of EU and eu­ro­zone bud­getary obli­ga­tions. An­gela Merkel, the Ger­man

The ini­tial tab is $50 bil­lion. . . just for triage. . .the pa­tient ul­ti­mately will re­quire much more.

prime min­is­ter, and her coali­tion lis­tened to the loud protests of fis­cally con­ser­va­tive Ger­man tax­pay­ers and made a U-turn in March, declar­ing Ger­many will not par­tic­i­pate in the Greek bailout un­less the IMF ponies up about half the cash and takes the lead in dic­tat­ing and en­forc­ing the terms Greece to which must com­mit.

The other EU mem­bers, France, et al., were shocked at first, but af­ter hear­ing no push­back or sham­ing from the IMF, the U.S. Congress or Mr. Obama, quickly warmed up to the idea. And why not? Why re­ject what will be tens of bil­lions of dol­lars from oth­ers, start­ing with U.S. tax­payer cash?

In short, when Ger­many’s tax­pay­ers said “no” to the bailout, Mrs. Merkel lis­tened and said “no.” The Euro­peans looked around and found the IMF and Mr. Obama, who has less of a prob­lem say­ing “yes” to spend­ing, re­gard­less of how loudly his fel­low cit­i­zens clamor for fis­cal re­straint.

Amer­ica can eas­ily put a stop to this mis­use of the IMF. While the U.S. Congress and pres­i­dent don’t have di­rect con­trol over the IMF, they cer­tainly have a very ef­fec­tive bully pul­pit, given that Amer­ica is the largest donor coun­try. The IMF and United States should call Ger­many’s bluff. Ger­many has far too much to lose, in fact, the most — if Greece were al­lowed to col­lapse and put the euro cur­rency at risk. If that were to hap­pen, Ger­man Tea Party move­ment not with­stand­ing, any Ger­man govern­ment would con­trib­ute its fair share of an in­ter­nal eu­ro­zone bailout.

With­out de­lay, all Amer­i­cans — red state, blue state, from Tea Party folks to Char­lie Ran­gel fans — should be writ- ing letters to their con­gress­men, sen­a­tors and pres­i­dent, de­mand­ing that they push back and use Amer­ica’s bully pul­pit. The bl­o­go­sphere and ra­dio/TV pun­dits should be mo­bi­lized. Amer­i­can tax­pay­ers must toss this rot­ten egg back across the At­lantic to their Ger­man coun­ter­parts. We’ll deal with our Cal­i­for­nia, and they can deal with their Greece, thank you very much.

Mr. Pres­i­dent and madam speaker, please make an ef­fort to stop U.S. tax dol­lars from plug­ging holes in na­tional bud­gets within the eu­ro­zone. We can’t af­ford it, and the eu­ro­zone cer­tainly can take of its in­ter­nal fi­nan­cial is­sues. Af­ter all, the dol­lar has fallen more than 40 per­cent against the euro in the past decade be­cause the mar­kets be­lieve our fi­nan­cial sit­u­a­tion is even worse that the eu­ro­zone’s. The Euro­peans think we are suck­ers for go­ing along with this. Not one U.S. tax­payer penny should go, di­rectly or in­di­rectly, to­ward fill­ing bud­get gaps in the eu­ro­zone.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.