Julie Borowski
FreedomWorks
11/29/2010
Last week, the International Monetary Fund (IMF) announced plans to bailout Ireland. Since U.S. taxpayers pay 17 percent of the IMF’s funding, we are the world’s largest contributors. This means that American taxpayers will be on the hook again for billions of dollars to prop up failed economic policies overseas. With the largest share of voting power, the U.S. government has the authority to veto any IMF bailout. For the sake of American taxpayers, Congress should reject any effort to bailout profligate European countries.
Earlier in the year, the U.S. government sent 145 billion taxpayer dollars to Greece. The economic fiascos in Greece and Ireland are remarkably similar. Both countries spent more money than they could reasonably afford. In Commentary, Jim Glassman writes:
Greece has been behaving as if it were truly rich. The secret was borrowed money. At the end of 2009, the country had a public debt equivalent to 114 percent of its GDP… Meanwhile, Greece consistently violated the EU’s rules for minimum deficit and debt levels. The Greeks, however, lived better and better, with an official retirement age of just 58.
Unfortunately, Ireland’s government also made a series of irresponsible and costly decisions. On the heels of the financial crisis, Ireland responded by increasing the size and scope of government. The Carnegie Endowment for International Peace points out that “European monetary policy…was far too loose for Ireland.” Just as we saw in the US, Europe’s loose monetary policy caused the supply of credit to explode followed by a foreseeable crash. This bust is an inevitable consequence of excessive credit creation by central banks…
The article continues at FreedomWorks
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