International BusinessLawmakers oppose Obama proposal to fund IMF
Two Democrat Congressmen today appealed to their colleagues in the US Congress to oppose the Obama Administration"s proposal to fund $108 billion to the International Monetary Fund.
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In a "dear colleague" letter, the two Democrats argued that giving such a huge amount to the IMF to bail out the third world countries from their current economic crisis is not going to work because of restrictive policies enforced by it in the countries where it provides such aid.
The letter was written by Congressmen Dennis J Kucinich from Ohio and Bob Filner from California.
"In fact, while the G-20 states that this funding is intended for global stimulus, the IMF has imposed budget deficit targets, tax hikes, pension and wage freezes, and high interest rates on loan recipients," the two lawmakers said.
"The IMF has a long history of placing economic conditions on countries receiving loans that have actually damaged, rather than stimulated, those economies, and its policies have not changed enough to warrant support," they said.
Referring to media reports in Europe, they apprehended that the IMF funding would be used to bail out private European banks with US taxpayer money.
"Recently, Iceland entered into an agreement with the IMF in which the IMF required the government of Iceland to guarantee private sector debt. Why? Because the US would not support the IMF loan without the provision because of British interests in Iceland"s private sector debt," the lawmakers asked.
"Our country and thus body cannot afford to spend American tax payer dollars to bail out private European banks. Please oppose the war supplemental and the funding for the IMF," they said in the letter.