IMF Managing Director Christine Lagarde has been talking up the need for greatly expanded resources to bail out ailing European economies. European nations have offered to channel about $200 billion of their own funds to themselves through the IMF (a kind of gentleman’s money-laundering to avoid restrictions in their own treaties). Lagarde wants others to add $300 billion to that kitty. The U.S. Treasury has said no, and rightly so. Replacing current euro-debt with IMF loans, no matter how rigorously structured, will only prolong the agony. The failing euro-zone economies …
A dire prediction hit the news yesterday: A date has been set for the end of the “Age of America,” — i.e., when China’s economy will overtake the United States. The news comes by way of an International Monetary Fund (IMF) forecast that shows China’s economy surpassing America’s by 2016. Though there are reasons to question the IMF’s conclusions, it is true that if the U.S. does not get its fiscal house in order, the era of American leadership will be over. Columnist Brett Arends writes in MarketWatch that China’s evolution into …
The Washington Post reported today that the International Monetary Fund and various world governments warned U.S. officials years ago that “escalating financial problems” in the United States “had to be addressed quickly to forestall a larger threat to the world economy, but those urgings were discounted.” The Post went on to observe that by the time U.S. officials finally responded, “the price tag for stemming the financial contagion had soared.’ Truth to tell, the Post story was not about the U.S., but about Europe’s debt crisis beginning with Greece. But …
When Britain’s new Chief Secretary to the Treasury, David Laws, walked into his office last week, he found a letter from his predecessor, Liam Byrne. Laws assumed it contained useful advice. But when he opened the envelope, he found that the letter – which he characterized as “honest but slightly less helpful” than he had expected – had only a single line: Dear Chief Secretary, I’m afraid to tell you there’s no money left. And so there isn’t. Americans don’t realize just how bad Britain’s situation is. True, Britain’s not …
The tragic events unfolding in Greece, where at least three people have died in political rioting protesting austerity measures being imposed as part of an EU and IMF financial bailout, is a vivid reminder of the danger when the line between government and commerce is blurred or destroyed. In a free market economy, individual firms rise and fall, individual banks succeed or fail, and individual employees prosper or struggle, depending on their own effort and ingenuity. Individual failure, while painful, is not a threat to society, and a well functioning …
The European Union (EU) has gone hat in hand to the International Monetary Fund (IMF) for assistance in bailing out one of its own. 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. …
The proposed €110 billion ($140 billion) Greek rescue package announced on Sunday may well not survive the week. Watching public sector workers storming the Acropolis in protest at proposed government spending cuts and tax increases, raises the question of whether the Greek Government itself can survive. Eurozone countries have agreed to provide €80 billion in emergency loans over the next three years for Greece, with the rest coming from the IMF. In exchange for avoiding bankruptcy (at least for the next couple of months), Greece has agreed to pass a …
The International Monetary Fund (IMF) is attempting to do what couldn’t be done at the international climate change conference in Copenhagen last December: Transfer large sums of wealth from developed countries to developing ones in the name of climate change. From BusinessWeek: Dominique Strauss-Kahn, head of the International Monetary Fund, said the organization is helping to set up a “green fund” that would raise $100 billion a year by 2020 to mitigate the effects of climate change in developing countries. Strauss-Kahn indicated the fund may use its quotas, which reflect …
Yesterday President Barack Obama asked his cabinet to make a total of $100 million in cuts among their departments. That was “fiscally responsible” President Obama. We like him. We just wish we got to see him more often. Today, “reckless spending” President Obama is back at work, following through on his G20 summit pledge to loan $100 billion for world wide stimulus. Heritage fellow Terry Miller explains why such stimulus is a bad bet: It is a spectacularly bad and high risk idea to pour vast new sums through failed …
Unraveling the meaning of the G-20 summit will be the work of months, if not years. Many of the announced measures are vague, and the ones that are less vague are not encouraging. The promise to continue “expansionary policies for as long as needed” is an open-ended invitation to tax, borrow, and spend, while the pledge to “support sustainable compensation schemes and the corporate social responsibility of all firms” is foolhardy. The responsibility of firms is to obey the law and make profits for their shareholders, not to be subject …
