Bailout Fatigue: Republicans, Ukraine and IMF Funding

♠ Posted by Emmanuel in ,, at 3/22/2014 01:38:00 PM
During the European financial crisis, the term "bailout fatigue" was coined to mean Germans getting tired of bailing out undisciplined EU members. Now, the term is being bandied about as the Obama administration eyes increasing US contributions to the IMF in light of the events in Ukraine. Unfortunately for Obama, while Republicans have been the more belligerent of the two American political parties, they haven't exactly put their  (peoples') money where their mouths are at.

Republicans generally agree with the John Bolton (remember him?) line that massively increased military spending is  necessary in order to combat the Russian menace and all manner of threats against freedom, justice, mom, apple pie, and the American way of life. It thus seems odd that only when it comes to upping contributions to the IMF--subservient panderer to Western interests that it is in funneling emergency lending to various destitute but geopolitically important countries like Ukraine--that they balk.

In other words, deficits from military spending don't matter, but deficits from the Obama administration asking for increased IMF funding do:
House Speaker John Boehner and other congressional Republicans say the increased IMF money isn’t necessary to help Ukraine. Instead, they say the White House is using the aid measure to persuade Congress to make changes to the IMF that have stalled since Republicans took the House majority in 2011. “At a time of massive deficits, we have a problem with expenditure of these funds -- and increasing them,” Representative Patrick McHenry, a member of the Financial Services panel, said in an interview at the Capitol last week. 
The debate concerns making permanent a temporary boost to IMF resources committed by the US during the global financial crisis:
The U.S. contributed a $100 billion credit line in 2009 to an emergency pool of money intended to boost the IMF war chest during the global recession. The proposal would transfer about $63 billion from that pool into the fund’s permanent resources to boost the U.S. share at the fund, or quota, and implement a 2010 international agreement. The Senate plans to hold a procedural vote on March 24 on Ukraine aid legislation, S. 2124, that includes the IMF funding [my emphasis]. The bill also would authorize $1 billion in loan guarantees and sanctions against Ukrainians and Russians deemed responsible for corruption and violence...

“I strongly oppose having that provision in there,” said Representative John Campbell, chairman of the House Financial Services subcommittee that oversees the IMF. “What the administration is saying about it is absolutely, patently false. This is the problem with this administration, they can’t be straight with you.”  
In essence, the IMF has been subject to political football by the world's most indebted country. Which, in truth, would only be committing more money to IMF resources from funds borrowed from countries like, er, Russia. Anyway...
Republican and Democratic administrations have seen opposition from the other party when trying to pass IMF measures, said Edwin Truman, an assistant Treasury secretary for international affairs in the Clinton administration. “These are always hard swallows, they’re big numbers, it’s not easy for anybody to vote for,” he said. “Then you have layered on top of that the current poisonous atmosphere.”

Misunderstanding of what the IMF does, combined with recent bailouts to rich countries such as Greece or Ireland, have emboldened opponents. IMF supporters have left Congress [...] while Tea Party-backed Republicans are questioning foreign bailouts as U.S. debt rises.
What these Republican doofuses probably don't recognize is that the IMF is a fairly inexpensive way of exercising (financial) hegemony on the cheap. Sure the US has massive debts, but when it comes to emergency lending to strategically important countries, the IMF helps fulfill such purposes.

UPDATE: To no one's real surprise, increased IMF funding has been dropped from the Ukraine aid package the US is readying.