Where there's a Will, there's a way

All the attention over funding to close Guantanamo overshadowed a $100 billion loan to the International Monetary Fund included in the war spending bill Congress passed last week. The money is designed to aid foreign economies but IMF loans often come with unwelcome strings attached. The latest I've read is that changes can still be made in conference committee.

Soap-opera coverage in the U.S. corporate press mentions Republican objections over whether the money will be repaid. But as usual, I had to turn to the foreign and alternative press to get the real story on why it's so important and controversial. Robert Naiman explains at Huffington Post,

The IMF is imposing policies in developing countries we wouldn't accept in the U.S. - when we have a recession, our government spends money to help the economy recover, as we did in President Obama's stimulus package. When developing countries have a recession, the IMF demands budget cuts... In particular, the IMF should not be imposing Republican economic policies in Pakistan and Afghanistan, since that fundamentally undermines the quest for political stability in these countries. It's the height of self-defeating absurdity to appropriate US tax dollars for reconstruction and development in these countries while with the other hand - the IMF hand - we tell them that their governments can't stimulate their economies.

Mark Weisbrot gives a little background in The Guardian about the IMF worsening the economic crisis in Asia a decade ago and is skeptical that they've reformed their policy of pushing what I call ultra-conservative, supply-side, neo-colonialist policies.

At least nine agreements that the fund has negotiated since September 2008 - including with Eastern European countries, El Salvador and Pakistan - contain some elements of contractionary policies. These include fiscal (budget) tightening, interest rate increases, wage freezes for public employees and other measures that will reduce aggregate demand or prevent economic stimulus programs in the current downturn.

The IMF has long had a double standard when it comes to dealing with economic downturns. For the rich countries, it can be quite Keynesian: it is currently recommending a global fiscal stimulus of 2% of GDP. But for the developing countries that are actually forced to follow the fund's advice, there is often a different story: they "cannot afford" these expansionary policies during a recession.

This kind of garbage is why I didn't want another Clinton in the White House. We shouldn't give money to the IMF if they're going to stop developing countries from having the same type of economic policies that work in the United States. I'm looking for change, Mr. President!