Who Can We Bail Out Next?
April 23, 2012
By Tom Barrett
Who can we bail out next? How about Europe? Does that sound like more money than the US can afford? No problem – we’ll just print more!
Baseball is no longer the national sport. The new national sport – actually an obsession - is bailouts. We started financing failure through bailouts at the end of the Bush Administration. But Obama has turned it into an art form. He’s become the Maestro of Money, directing the lavish giveaway of Trillions of our taxpayer dollars.
He has bailed out investment banks, insurance companies, the automobile industry and mortgage companies – to name just a few. Now it looks like he’s going to skip the next logical step – bailing out a nation – and go right to the top: A bailout of the European Union.
Why should the United States bail out the EU? After all, in the Panic of 2008 it was the US Federal Reserve System that provided the funds for the misguided bailouts. Why can’t the European Central Bank – their equivalent of the US Federal Reserve – bail out their own members?
It can – but the most influential and wealthy nations don’t want to. Germany and France have offered some aid, but with strings attached. They want the free-spending, debt-ridden PIGS to do some belt-tightening first. They want those governments to cut spending and debt, and stop paying for every need and desire of their citizens. I agree.
Obama doesn’t. He loves spending – and debt. And he wants to bail out the PIGS of Europe. There’s just one problem – Congress. Obama can’t legally bail out Europe without Congressional approval. But he’s not the type to let a little thing like the Constitution get in the way of his global ambitions.
Officially, the US and Canada have already turned down the EU’s request that they participate in a $30 Billion bailout. The US refused because Obama knew he couldn’t get Congressional approval.
But like his competitor for the title of the Worst US President – FDR – Obama knows there are many ways to skin a cat. FDR stole 40% of the wealth of the United States – 530 Metric Tons of Gold – from US citizens in 1933 without Congressional approval or Constitutional authority. Roosevelt did his evil work using an Executive Order (one of Obama’s favorite toys).
But it looks like Obama plans to use another devious device this time. He can circumvent Congress by letting the IMF (International Monetary Fund) do his dirt work.
The IMF is supposedly an international organization. It is. It’s international in the same way that some of our military coalitions have been “international.” When the US has 250,000 troops in a conflict, Great Britain has 2,000, Australia has 120, and the Netherlands send 12 – politicians call that “international.” I call that tokenism.
The IMF is the same. It, along with the International Bank, was started by the US in 1944 at the Bretton Woods conference. Like the UN, we pay the great majority of its costs. Unlike the UN, we control the IMF. If it does not follow our instructions, we can simply walk away. Without our funding, the IMF would cease to exist.
So for the Administration to say that the US will not participate in the European bailout is just – well it’s just what this Administration has become known for. It’s a lie.
The IMF has already participated in the bailout of one of the PIGS (Greece), and you can bet that it will cough up a lot more. Whatever the European Central Bank refuses to cover, I predict that the IMF will. And, of course, WE are the IMF.
Several years ago in this column I wrote about the PIGS of Europe – Portugal, Ireland, Greece and Spain. I said that those nations, so anxious to please their voters that they gave them everything and demanded almost nothing, would come to ruin. So far, the citizens of all of those bankrupt nations except Spain have rioted, killing people and burning buildings, and demanded more, more, more! More freebies! More vacation time! More pay! Shorter work weeks! I believe that Spain, with its 20% unemployment brought on by government idiocy will soon join the riot club.
Obama will do his best to bail the PIGS out because he believes in the same things they do. He believes that government should provide all the needs and wants of the people from cradle to grave. The only problem is that he understands nothing about economics. He has no clue how to pay for all this.
So he says to the Fed – “PRINT MORE MONEY!”
The poor, benighted dunce doesn’t realize that we can’t print money forever. Money has to be backed by debt (the Treasury notes and bills you hear about on the news). And someone has to buy the debt. Obama has plunged our nation deeper and deeper into debt – the National Debt has increased 50% since Obama took office. And we have lost our AAA Credit Rating, so other nations have understandably backed away from buying US debt. Soon we won’t be able to print any more money. What then, Obama?