Saturday, May 15, 2010

Hey lets not bailout Europe

If you had 7 billion dollars and your nation was currently at an all time high deficit, what would you do with the money?  If your answer was to bailout a nation over 5,000 miles away, than you'll be pretty pleased with the IMF's decision to bailout Greece:

The International Monetary Fund has put up nearly $40 billion to help bail out Greece and appease investors' fears of a spreading European debt crisis.

The IMF's executive board met in Washington Sunday to approve a three-year, euro30 billion loan for the debt-plagued nation, part of a $140 billion package (euro110 billion) negotiated with other eurozone countries.

The US is currently the top contributor by far at 17%, where the nearest second nation (Japan) comes in at a mere 6%.  This means that not only do we have to pay for Greece's mistakes, but we have to pay more than anyone else in this IMF bailout.  And not only are we paying more than anyone else, but we're paying with money we don't have to a nation that got itself into this mess because it was in too much debt.

How does this make any sense at all?

To make it all worse there is the distinct possibility that we may have to bailout other European nations, nations which will require much more money such as Italy, Spain, and Portugal.  All of this is particularly puzzling since I've been had it hammered into my head repeatedly that Europe is superior in every way, but especially in economic matters.  I suppose such superiority must, at times, be supported with bailouts, but in keeping with the masquerade we can it tribute or say we "owe" them.

Of course none of this was necessary.  Senator Jim DeMint tried to avoid this very thing last year by adding an amendment that would of prevented the IMF from using US money to bailout other nations.  Obviously the amendment was defeated and now we're stuck fixing a mess that we may very well find ourselves in years down the road. 

But even without the amendment we could of made a bit of noise and made it apparent we were being dragged into this.  We could of made it clear that we would work harder to prevent any of our money from going to irresponsible nations in the future.  But we didn't, and so now if the rest of the Mediterranean needs a bailout, I'm sure they'll get it, because that's how this works, one bailout begets another.  Make sure to keep Europe on your radar for a bit.

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