I’m not a fan of the International Monetary Fund. It galls me that a bunch of bureaucrats enjoy opulent lifestyles at our expense, and don’t even have to pay on their lavish incomes.
But I might be willing to overlook all that if it wasn’t for the fact that IMF routinely and reflexively pushes for bad policy.
- Endorsing government cartels to boost tax and regulatory burdens.
- Trying to undermine flat tax systems in Albania and Latvia.
- Encouraging a “collective response” to over-spending in welfare states.
- Pushing for higher tax burdens in Greece.
- Seeking the same destructive policy in Cyprus.
- Advocating for more centralization and bureaucratic rule in Europe.
- Urging higher taxes in El Salvador.
- Supporting “eurobonds” so that taxpayers from other nations can subsidize the profligacy of welfare states such as Greece, Italy, and Spain.
And the icing on the cake is that the IMF was created for the purpose of helping the manage the system of fixed exchange rates that was imposed after World War II. That system no longer exists, yet the IMF is still plaguing us.
I’ll be happy if they simply take their hands out of my pockets
I remember reading someplace that cockroaches were the only animals that would survive a nuclear war. I have no idea if that’s true, but it appears that international bureaucracies have similar survival skills.
But I’m digressing. Notwithstanding all the bad news listed above, we’re celebrating some good news today.
Here’s the situation. The IMF has been so busy subsidizing bad policy around the world with lots of bailouts that the gold-plated bureaucracy wants American approval to permanently misallocate more of the world’s capital.
I’ve explained over and over again why it’s not a good idea to give more matches to a pyromaniac. But I never expected that lawmakers would do the right thing.
Yet they have, so let’s enjoy this fleeting experience. Here are some excerpts from a Reuters report.
…lawmakers…rebuffed a request by the Obama administration to approve a permanent increase in U.S. funding to the International Monetary Fund in a setback for IMF reforms to boost the voting power of emerging economies. The reforms need congressional approval because they involve shifting and making permanent a $65 billion U.S. contribution to an IMF crisis fund. …the U.S. Treasury sought to tuck the provision into pending legislation in Congress that aims to avoid a U.S. government shutdown at the end of March. The Republican-controlled House of Representatives rejected the IMF funding request last week, but the administration hoped the Democratic-led Senate would include it in its version of the funding bill. After days of negotiations, authors of the bill in the Senate Appropriations Committee rejected the request as too politically sensitive in the tense budget environment in Washington, where the sweeping government spending cuts triggered on March 1 are starting to be felt.
Wow. I wrote previously that rejecting additional IMF handouts was a minimum test of GOP seriousness in the battle against statism.
And they actually cleared that hurdle. Miracles do happen!
But there’s no such thing as a permanent victory in the battle against statism.
The Obama administration will have another shot at winning approval for increased IMF voting power when Congress starts work on a new set of spending bills later this spring for the 2014 fiscal year, which starts on October 1. But failure by President Barack Obama to reach a deal with Republicans to shrink the U.S. budget deficit could complicate any new requests for IMF funding, aides cautioned.
Not only is there no such thing as a permanent victory, even this bit of short-run success probably doesn’t mean much. If I understand correctly, the IMF already received the authority to squander the additional $65 billion. All that’s really happening now is a fight over whether to grant the bureaucrats permanent approval to misuse the funds.
But I’ll take any victory. Fighting for freedom in Washington is a rather grim task. Yet in the past month, we got the sequester and now we’ve stiff-armed the IMF.
I’m almost delirious with joy.
P.S. While the IMF almost always pushes bad policy, there are occasional glimmers of sanity from the economists on staff who write reports. Researchers at the international bureaucracy, for instance, have acknowledged the Laffer Curve and warned that it makes no sense to push taxes too high. And some of the bureaucrats have even admitted that it sometimes make sense to reduce the burden of government spending.
And even though it wasn’t their intention, IMF bureaucrats even provided very strong evidence showing why the value-added tax is a destructive money machine for big government.
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