End the Bailouts: A New Idea on America Speaking Out

Jul 21, 2010


Former Prime Minister Margaret Thatcher once said, “The problem with socialism is that you eventually run out of other people’s money.”  That’s true, and in the case of Greece and the European Union, decades of “spend and borrow” economic policies have created a dangerous debt crisis which has put the entire Continent on the brink of bankruptcy.  To keep the government spigots flowing, the European Union has requested a $360 billion bailout from the International Monetary Fund.   What many people don’t realize is that the United States is the largest contributor to the IMF.  That means over $60 billion of U.S. tax money will be funneled through the IMF to the European Union to prop up failed socialist policies that have become too expensive to pay.  In fact, the cost to U.S. taxpayers may reach even higher.

On July 18, the IMF announced that it was seeking an extra $250 billion from member nations (including the U.S.) because – in the words of Youssef Boutros-Ghali, chairman of the IMF’s policy committee – "If we are going to start including funds made available to Europe, then the IMF is not properly resourced.”  In 2009, the U.S. contributed about 35% of the IMF’s $284 billion increase in the size of its Strategic Drawing Rights.  If the U.S. were to contribute a similar percentage to the IMF’s newest request, the cost of global bailouts to America – just in the past year – would come to about $90 billion.

The question Congress needs to ask itself is: At a time when the federal government is burdened with a $13 trillion debt, and we are expected to run trillion-dollar deficits for as far as the eye can see, does it really make sense to borrow more money – much of it from China – to subsidize the reckless government spending of relatively wealthy nations, such as Greece, Spain, and Italy?  One would think that President Obama would respectfully ask the European Union – whose economy is equal in size to America’s – to solve its problem without using U.S. tax dollars.

The President, however, has worked behind the scenes to facilitate the EU bailouts.  And while most bailout supporters at least acknowledge the need for less government spending and borrowing – in Europe, America, and throughout the world – President Obama stood alone at the recent G-20 economic summit in urging caution – not urgency – during a rare mood of austerity among our allies.

Rep. Mike Pence (R-IN) and I are leading the Congressional effort on this issue.  On May 13, we introduced The European Bailout Protection Act, which has 44 cosponsors.  Our bill would protect U.S. taxpayers from getting more involved in a “Euro-TARP” by requiring the EU nations to meet the fiscal requirements mandated by their own treaty before they can withdraw U.S.-provided bailout funds.
I’ve also introduced a Congressional resolution opposing U.S. participation in the bailout. This week, I posted a video about my Resolution at the new interactive website AmericaSpeakingOut.com.  Right now, any citizen can go to AmericaSpeakingOut.com to discuss my Resolution and vote on it.  I encourage everyone to vote “yes” and to spread the word to others.  By raising awareness, we can bring the Resolution to the floor.  And should Congress approve my resolution, it would send a powerful message to President Obama, Speaker Pelosi, and Secretary Geithner that we cannot take this “too big to fail” philosophy to a global level. The only thing “too big to fail” is America itself.

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