The Europeans have just agreed to another bailout for Greece. That’s the bad news.
The good news is…well, there is no good news. Sarkozy, Merkel, and the other statists have once again failed to do the right thing and instead have decided to throw good money after bad and dig the debt hole even deeper.
But there is worse news. The IMF is financing part of the bailout and American taxpayers are “shareholders” in the IMF.
In other words, I’m helping to reward bad behavior and misallocate global capital. This doesn’t make me very happy – especially since the White House supports this misguided approach.
But this is business-as-usual for the IMF, and here’s a first-hand example.
I’m in El Salvador where I just finished two days of speeches, meetings, and interviews to discuss how the country should deal with its fiscal imbalance.
My message is simple. El Salvador should reject tax hikes and instead put government on a diet by capping annual spending growth so the budget grows by 1 percent or 2 percent annually.
Ever single reporter responded by saying some variant of “but the IMF says we need to raise taxes.”
During the first interview, I simply said the IMF was wrong. During the second interview, I said El Salvador should refuse to let IMF bureaucrats in the country. After I heard the same IMF message the third time, I suggested shooting down any flight carrying IMF bureaucrats and their snake-oil economic advice.
The last comment was a joke, of course, but it does raise a fundamental question. Why are American taxpayers subsidizing an international bureaucracy that runs around the world urging higher taxes and bailouts?!?
To be fair, the IMF usually includes some good advice in their reports. If you read the fine print, the bureaucrats often recommend reductions in subsidies, red tape, government payrolls, and handouts.
But if you give politicians in any country a set of options, and higher taxes and/or bailouts are on the list, it doesn’t take a genius to realize that the good reforms will get ignored while the bad policies will be adopted.
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[…] racismo. Después de todo, el FMI ha sugerido impuestos más altos en Estados Unidos, en China, en Latinoamérica, en Oriente Medio y en Europa. (Los que trabajan en el FMI no pagan impuestos sobre sus salarios, […]
[…] by racism. After all, the IMF has pushed for higher taxes in the United States, in China, in Latin America, in the Middle East, and in Europe. (folks who work at the IMF don’t pay taxes on their own […]
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[…] balances out calls for bad policy in the developed world with calls for bad policy in other places as well. And the one constant theme is that taxes always should be […]
[…] balances out calls for bad policy in the developed world with calls for bad policy in other places as well. And the one constant theme is that taxes always should be […]
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[…] Urging higher taxes in El Salvador. […]
[…] Urging higher taxes in El Salvador. […]
[…] Urging higher taxes in El Salvador. […]
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[…] when is it appropriate to use the term “reform efforts” to describe policies that subsidize moral hazard and reward profligacy? And how is it accurate to say that IMF actions “backstop the global economy” when the […]
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The problem is that statists/leftists have captured educational institutions and mass media. Hence, populations at large will believe what they say and not believe anyone who comes from a free-market perspective. As soon as they hear the word “capitalist” they immediately turn off what is said and rather believe the propaganda of the statist. Added to this is that so many (if not the majority) of the populations (including businesses) of Europe and America are receiving government benefits in one way or another. Hence, they do not want to hear anything that would threaten their benefits, irrespective of the long-term consequences. Our only hope in my opinion is to pray our hearts out and discontinue our own immorality (being a believer, I sincerely think our immorality is key to our problems) and to engage in education, education, education. One important piece would be a simple explanation of the federal reserve and its actions since its inception and the effects of such. In addition, key is a simple and clear explanation of the “great” depression with facts and statistics showing how statist and federal reserve policies created it and prolonged it. Then we must may such information go viral on the internet. If we could convert at least a few of the mass media crowd then we would really make some inroads. The masses trust them!?!?!? amazing as it is!!! We are in an uphill battle. We are the underdog in this battle. We have to be willing to fight on irrespective of our losses.
Thanks so much Dan as you are doing your part to the max!!! God bless.
crisap444 reblogged this on The Conservative New Ager and commented: Oh just let these countries default so we can actually hit rock bottom and move on from there…
Why are American taxpayers having to subsidize ALL of the stuff we’re onthe hook for?
And when we’re broke ourselves as well.
[…] posted here: El Salvador, Greece, and American Tax Dollars: The Destructive … Related Posts:Greece faces stormy waters in its bid to cut tax evasion – CNN [unable to […]
And here we all are…http://online.wsj.com/article/SB10001424052970203687504577001671498250002.html?mod=WSJ_Opinion_AboveLEFTTop
Everyone bails out everyone. Except this is dishonest, because what is being bailed out is not the countries, but the investors in their debt. None of which was issued with the full faith and credit of the US.
This needs to stop. Now. Let the markets find their levels and move on. There is no added value here, in reference to another’s comment.