Update to my update: The ministers of the IMF have stated that they will beef up its resources through loans, increase their firepower, and give the rescue fund more leverage power through the ECB. I’m not exactly sure what this means, but I am sure it is going to cost us.
Meanwhile, the Eurogroup released another $8 billion euros to Greece today, because Greece was going to run out of money in the next three weeks.
How long do they think they can keep this going? They bail out countries without the necessary substantive changes being made to affect their downward spiral. The U.S. can’t seem to make the changes either unfortunately.
Update: Whatever Jay Carney makes, it’s not enough for all the lying he has to do. No sooner do I post this when I am sent the following on NetRight Daily. Even though Jay Carney said we won’t bail out Europe, we apparently already have –
And, on Dec. 16, the IMF’s board of governors dutifully adopted the proposal, sending it back to member states, that Japan, the UK, Korea, and others have already approved.
The U.S. already has a $108 billion stake in the IMF. The new proposal to double member quotas would raise the U.S. stake by about another $100 billion, and would require congressional authorization.
Having 16.76 percent of the vote in a body that requires 85 percent approval to act, the U.S. wields an effective veto at the IMF. That means Treasury Secretary Timothy Geithner has already voted at the IMF to double U.S. taxpayers’ exposure to risky foreign debts.
So, with all due respect to Carney, the Obama Administration has already approved additional resources from U.S. taxpayers that, if adopted by Congress, will be used to bail out Europe. A recent Congressional Research Service (CRS) report published in September showed the IMF had already dispensed €78.5 billion to the creditors of Greece, Portugal, and Ireland, or about $112 billion for refinance bailout loans. The U.S. stake in that bailout already totals at least $20 billion.
Yet, the IMF apparently has not made any official requests to the White House or Congress to increase its quotas, according to congressional sources — yet. When it does, legislation will likely be introduced shortly thereafter.
Original Story: Stuart Varney was on Fox today saying that we have to bail out Europe, even if it is a half trillion, maybe a trillion, because the situation is that critical. I don’t know where we are going to get the money from, I guess we will borrow it from them or we can borrow it from China whose banks wouldn’t pass a stress test.
A year ago, the IMF asked that the IMF resources be doubled to $750 billion from its current $375 billion level. We provide 20% of the IMF funds. I imagine the IMF will ask for an increase.
Obama said that we would not offer financial support, however, he also said, “The United States stands ready to do our part to help them resolve this issue. If Europe is contracting…it’s much more difficult for us to create jobs here at home. We’ve got a stake in their success.”