Kathianne
06-20-2009, 07:03 AM
Can't walk away from IMF and hope to keep the currency going:
http://experts.foreignpolicy.com/blog/7699
C. Randall Henning's blog
America the deadbeat?
Tue, 06/02/2009 - 4:36pm
Want a global recovery? Better hope Congress delivers the money the United States promised the IMF.
By C. Randall Henning
In the war to win back the global economy, the leaders of the G-20 have placed the International Monetary Fund (IMF) at the center of the battlefield, armed with $750 billion in promised funding to pull emerging economies back from the edge. Speaking in China this weekend, U.S. Treasury Secretary Timothy Geithner praised the plan as "an insurance policy for the global financial system." The IMF, he seemed to be saying, is a white knight for an economy in the red.
That is, until the plans made their way to Capitol Hill. Just two months after leaders of the world's major economic powers made grand promises of action, those plans face resistance in the U.S. Congress. The Senate, before leaving town for Memorial Day recess, approved legislation to meet President Barack Obama's commitments made at the G-20 summit in London. But the IMF funding didn't make the House bill. If Congress fails to include the IMF legislation in the final bill now being hashed out, it will put both the U.S. and global recoveries at risk.
At issue is an increase in the U.S. contribution to the IMF from about $56 billion to $64 billion, and the enlargement of an emergency line of credit from the U.S. Treasury to the IMF from about $10 billion to $110 billion. These steps would be followed by sales of gold to raise $6.6 billion to endow an investment account to cover expenses of the IMF, and distribution and expansion of IMF-issued reserves, called Special Drawing Rights. Other members of the IMF will also contribute, but U.S. delinquency could derail the whole reform package....
...Congress must not take U.S. influence within the IMF, or other nations' willingness to support it, for granted. Failure to support the fund would greatly weaken U.S. leadership and make it more difficult to veto or block fund decisions. Congress could grin at pinching a penny now, but failing to support the IMF would cost far more in dollars later.
C. Randall Henning is associate professor at American University and visiting fellow at the Peterson Institute for International Economics.
http://experts.foreignpolicy.com/blog/7699
C. Randall Henning's blog
America the deadbeat?
Tue, 06/02/2009 - 4:36pm
Want a global recovery? Better hope Congress delivers the money the United States promised the IMF.
By C. Randall Henning
In the war to win back the global economy, the leaders of the G-20 have placed the International Monetary Fund (IMF) at the center of the battlefield, armed with $750 billion in promised funding to pull emerging economies back from the edge. Speaking in China this weekend, U.S. Treasury Secretary Timothy Geithner praised the plan as "an insurance policy for the global financial system." The IMF, he seemed to be saying, is a white knight for an economy in the red.
That is, until the plans made their way to Capitol Hill. Just two months after leaders of the world's major economic powers made grand promises of action, those plans face resistance in the U.S. Congress. The Senate, before leaving town for Memorial Day recess, approved legislation to meet President Barack Obama's commitments made at the G-20 summit in London. But the IMF funding didn't make the House bill. If Congress fails to include the IMF legislation in the final bill now being hashed out, it will put both the U.S. and global recoveries at risk.
At issue is an increase in the U.S. contribution to the IMF from about $56 billion to $64 billion, and the enlargement of an emergency line of credit from the U.S. Treasury to the IMF from about $10 billion to $110 billion. These steps would be followed by sales of gold to raise $6.6 billion to endow an investment account to cover expenses of the IMF, and distribution and expansion of IMF-issued reserves, called Special Drawing Rights. Other members of the IMF will also contribute, but U.S. delinquency could derail the whole reform package....
...Congress must not take U.S. influence within the IMF, or other nations' willingness to support it, for granted. Failure to support the fund would greatly weaken U.S. leadership and make it more difficult to veto or block fund decisions. Congress could grin at pinching a penny now, but failing to support the IMF would cost far more in dollars later.
C. Randall Henning is associate professor at American University and visiting fellow at the Peterson Institute for International Economics.