IMF Greece Bailout Strategy

Floor Speech

Madam Speaker, this year we are going to go $1.6 trillion in debt. Most people can't comprehend $1.6 trillion. It's a lot of money. The national debt, we just found out recently, is going up to $15.1 trillion.

The reason I bring that up today, Madam Speaker, is because we've got terrible problems that we're facing here at home, and there are terrible problems that are being faced in Europe. As a matter of fact, I was in Greece last week, and they're cutting salaries in Greece by 40 percent. They're cutting retirement benefits by 40 percent. They're cutting health benefits by a large amount, and they're raising taxes because that country is a socialistic country and it's about to go completely bankrupt. In addition to that, Italy has the same kind of problems, Spain has the same kinds of problems, Portugal has the same kinds of problems, and Ireland is suffering from similar problems.

Now, the reason I bring that up is because the United States is part of what they call the International Monetary Fund. Most Americans don't know, Madam Speaker, that we put 18 percent of the money in the International Monetary Fund, into that fund to deal with world financial problems.

Now, the International Monetary Fund, according to their European Department Director Antonio Borges, stated that ``the IMF would definitely participate in a second bailout package for Greece.'' Now, that could be up to 200 billion euros, 200 billion euros; and when you talk about American dollars, that's about $280 billion.

The United States would be responsible for 36 billion of those dollars. That's American taxpayers' dollars that would be going to Europe to deal with the problems that Italy, Spain, Greece, and those other countries face.

But in addition to that, there was a recent announcement by the IMF that it was expanding its ``bailout firepower'' to $1.3 trillion, and there is a potential that the International Monetary Fund could create what they call a ``special purpose vehicle'' to buy the embattled bonds of failing European countries like Greece, Spain, and Italy. When you boil all that down, it means the United States could buy a great deal of the $1.3 trillion in bonds that would be purchased to keep those countries afloat.

Now, the IMF is not the primary vehicle of the Greek bailout. If they can't use that, they can use the Federal Reserve Board, the Fed, which has the authority to provide foreign central banks with an unlimited amount of dollars for an equivalent amount of currency.

On September 11 of this year, September 11, 2011, this year, the Fed did just this. It swapped American dollars for euros in order to provide the European Central Bank with liquidity to calm capital markets. Now, I don't think I need to go into a great deal more detail other than to say the United States is about to be involved in bailing out Europe.

We do not have the money.

As I said at the beginning of my remarks, we're going to be $1.6 trillion short this year. We've got a $15.1 trillion national debt, and it's going up very rapidly.

If the Fed, our Treasury Department, and the White House decide it's going to try to bail out Europe, these countries that are about to go belly up, it's going to cause even more economic problems in America. We have 9.1 percent unemployment right now, and can you imagine, Madam Speaker, what would happen if we started trying to bail out Europe as well? We cannot and we must not do that.

If I were talking to the President tonight, Madam Speaker, I would say, Mr. President, let's deal with the problems we have here at home. Let's don't take on more responsibilities that are not of our doing. We should not try to prop up governments that have been socialistic for a long, long time to the point where they have to cut salaries by 40 percent in order to try to keep their country afloat.

That's a problem they created. We have enough problems here at home, and we shouldn't be using American taxpayers' dollars to try to bail out European countries that have gone down the wrong path.

With that, I yield back the balance of my time.

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