Thursday, January 2, 2014
We all should care about the IMF
We all should care about the IMF
December 30, 2013, 11:00 am
By Nancy Birdsall and Clay Lowery
In the next few weeks, Congress can approve at little budgetary cost to U.S. taxpayers an increase in resources at the International Monetary Fund (IMF) that will help protect Americans from the costs of the next global financial crisis.
Why should government leaders and taxpayers care about an increase in resources at the IMF?
An increase in IMF resources makes eminent sense in a global economy that is bigger and more interdependent than ever, and in which the IMF is the closest institution we have to a global lender of last resort. You can think of the IMF a global financial fire department: as the global economy has grown, the IMF needs more resources to prevent local brushfires from spreading out of control.
Congress is understandably not focused on legislation to maintain the U.S. commitment to the IMF; in the partisan struggles on Capitol Hill, the IMF has been on the backburner. Now, however, the administration has begun providing much needed visible support for the legislation, and the omnibus appropriations bill provides an opportunity for the administration and Congress to move forward together on it.
The hard work has already been done. As part of the G-20 coordinated response to the 2008-09 crisis, the United States led a negotiation with the other 187 IMF members to increase IMF resources and to make modest changes in the allocation of the shares across country members. All other major economies, including key U.S. allies, have long since endorsed the agreement in their legislatures. Embarrassingly, this straightforward and sensible deal is now being held up by the failure of Congress to act.
The U.S. negotiators secured two key results in the 2010 negotiation that should make it easy for Congress to say yes. First, the United States need not contribute new money; it will simply transfer money Congress already appropriated five years ago from a special IMF-housed fund into the formal, permanent reserves at the IMF. Second, the United States will maintain its voting power within the IMF at the same level.
There are four reasons why the administration and Congress should work together to ensure that the necessary IMF legislation is included in the upcoming omnibus appropriations bill:
First, the United States benefits greatly from global financial stability. Bolstering the IMF’s capacity to assist hard-hit countries supports U.S. exports and jobs as well as confidence in financial markets generally.
Second, the IMF is a bargain for U.S. taxpayers. The specifics of the 2010 deal mean that the budget dollars the United States contributes to the IMF are leveraged one thousand percent by the other 187 countries’ contributions. Without the IMF, were a worldwide financial crisis to occur again, the United States and other wealthy countries would end up shouldering the burden directly at much higher cost.
Third, the IMF quota reform package includes modest increases in the shares and responsibilities of such large emerging markets such as Brazil, China and India. This is in everybody’s interest: it unlocks financial contributions to the IMF from these countries while ensuring their full engagement in a multilateral institution where the United States is still the dominant voice.
Finally, this is a thoroughly bipartisan cause. Since the IMF was created in the final years of World War II, every U.S. president, Republican and Democrat, has supported strong U.S. engagement with the institution. Presidents Ronald Reagan, George H.W. Bush, and Bill Clinton all backed legislation that increased resources to the IMF, and President George W. Bush championed legislation supporting reforms.
Who cares about the IMF? We all should. U.S. support for IMF critical to preserving U.S. global economic leadership. It’s also much needed insurance that when the next global financial crisis occurs we will have a global institution ready and able to respond as needed.
International Monetary Fund (IMF)
Christine Lagarde is a managing director for the International Monetary Fund (IMF), and attended George Soros’s 2013 wedding reception.
Note: George Soros was married in 2013 and Christine Lagarde attended his wedding reception, and is the chairman for the Foundation to Promote Open Society.
Foundation to Promote Open Society was a funder for the New America Foundation, the International Rescue Committee, the Carnegie Endowment for International Peace (think tank), the Committee for Economic Development, and the Brookings Institution (think tank).
Douglas A. Rediker is a senior fellow at the New America Foundation, and was the U.S. alternate executive director for the International Monetary Fund (IMF).
Timothy F. Geithner was an overseer at the International Rescue Committee, and a director of policy development & review for the International Monetary Fund (IMF).
Mohamed A. El-Erian is a trustee at the Carnegie Endowment for International Peace (think tank), and was the deputy director for the International Monetary Fund (IMF).
Jessica Tuchman Mathews is the president of the Carnegie Endowment for International Peace (think tank), a director at the American Friends of Bilderberg (think tank), an advisory council member for Transparency International-USA, was an honorary trustee at the Brookings Institution (think tank), and a 2008 Bilderberg conference participant (think tank).
Ed Griffin’s interview with Norman Dodd in 1982
(The investigation into the Carnegie Endowment for International Peace uncovered the plans for population control by involving the United States in war)
Stuart E. Eizenstat is an advisory council member for Transparency International-USA, a trustee at the Committee for Economic Development, and a national advisory board member for the Merage Foundation for the American Dream.
Donna E. Shalala is a trustee at the Committee for Economic Development, a national advisory board member for the Merage Foundation for the American Dream, and was a fellow at the Brookings Institution (think tank).
David Lipton is a national advisory board member for the Merage Foundation for the American Dream, and the first deputy managing director for the International Monetary Fund (IMF).
Posted by Sam and Bunny Sewell at 12:38 AM