The IMF

Daniel Mitchel at Cato notes that the Obama Administration thinks bailing out Greece makes sense. In other words, the Administration thinks American taxpayers should subsidize European profligacy. Here’s a passage from a Reuters report about a potential bailout for Europe via the IMF.
The United States would be ready to support the extension of the European Financial Stability Facility via an extra commitment of money from the International Monetary Fund, a U.S. official told Reuters on Wednesday. “There are a lot of people talking about that. I think the European Commission has talked about that,” said the U.S. official, commenting on enlarging the 750 billion euro ($980 billion) EU/IMF European stability fund. “It is up to the Europeans. We will certainly support using the IMF in these circumstances.” “There are obviously some severe market problems,” said the official, speaking on condition of anonymity. “In May, it was Greece. This is Ireland and Portugal. If there is contagion that’s a huge problem for the global economy.”

The current quota for the United States in the IMF is 17.73 percent of the IMF budget. So if the bailout to the EU is $980 billion from IMF, then the US portion is $174 billion. This, of course, is in addition to the IMF’s other expenditures. U.S. citizens, when they are fortunate to have a job work more hours per year than any European country. Retirement age in the U.S. is about 65 while in Greece it is 50 or less. Why should U.S. taxpayers subsidize the lifestyles of the Greeks – and other European countries – when those lifestyles are what led to the problem in the first place.

Is the bailout an attempt to stop a systemic crash in the world financial system? Hardly. If Greece should default, those banks holding Greek debt will lose but that is not a huge amount. All the bailouts do is prolong moral hazard. It is time to get the U.S. out of the IMF and the UN.