Mark Weisbrot reveals true purpose of the additional IMF funds

Via Znet (article originally appeared on Firedoglake), Mark Weisbrot, co-director of CEPR, reveals what is likely the true purpose of the additional funding for the IMF requested by President Obama.

Obama claims the funds are necessary for a global economic stimulus, but a recent CEPR study demonstrated that nearly all of the existing IMF agreements call for interest rate hikes, budget cuts, and/or tax increases. Such policies are the exact opposite of what you want to do during a recession and there is little evidence the IMF will change its ways if it becomes newly flush with cash. As such, Weisbrot believes that, in reality, the IMF funding is a means by which American taxpayers can cover the losses of European banks, which made tons of bad loans to Central and Eastern Europe in recent years. The process would look something like this: we provide money to the IMF, which is then loaned to crisis-stricken Central and Eastern European governments, who then use the money to pay back the debts businesses and individuals in their countries owe to Western European banks. Interest rate hikes, spending cuts, and tax increases on the poor would help facilitate the repayment of loans, at the expense of driving these countries further into recession.

Yet another example of the sad reality we're living in today. Heads they win, tails you lose.

Thanks to Professor Weisbrot for the article.