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What “other countries”? Not the United States, if one is to believe both the president and Senate Republicans. “Europe is wealthy enough that there’s no reason why they can’t solve this problem,” said Mr. Obama at a White House press conference last Thursday. “It’s not as if we’re talking about some impoverished country that doesn’t have any resources.”
Twenty-six Senate Republicans concur. On Friday, led by Jim DeMint (R-SC), they introduced the “No More IMF Bailouts Act.” The bill has three objectives: rescinding a $108 billion line of credit to U.S. funds given to the IMF in 2009, forcing Treasury Secretary Tim Geithner to veto future IMF bailouts, and stopping a proposed doubling of U.S. dues to the IMF.
Sen. Tom Coburn (R-OK) cut right to the heart of the issue. “Forcing American taxpayers to bail out bloated welfare states in Europe is unconscionable and immoral. It is bad enough that Congress refuses to make hard choices within our budget,” he said. “We don’t need to enable European governments to do the same. A bailout will prolong, not ease, Europe’s burdens.”
Who else is remaining on the sidelines at the moment? The European Central Bank (ECB). Last Thursday, ECB President Mario Draghi expressed “surprise” that people assumed the ECB would make large purchases of EU debt. Diane Swonk, senior managing director and chief economist at Mesirow Financial, described the ECB’s non-committal position as “brinksmanship” designed to extract as many concessions from individual EU governments as possible before making any further large-scale bond purchases.
Yet who is kidding whom? Despite all the pie-in-the-sky pronouncements, coupled with threats of “isolation” aimed at Britain for daring to resist the “superior wisdom” of EU elitists, nothing has been done to address the immediate liquidity crisis affecting both European banks and governments. The ultimate arbiter of this latest agreement will be the worldwide markets, specifically the bond markets. They will ultimately reveal whether investors, as they were last Friday, can be sold yet another pig in a poke masquerading itself as yet another grand bargain.
As for Britain, what David Cameron did is best expressed by Telegraph columnist Janet Daley. “What just happened, after all?” she writes. “We jumped off a bus that was hurtling toward a brick wall….The crash, when it comes, will be truly dreadful, and all the more tragic because a delusional European elite refused to accept its inevitability.”
David Cameron has. And on a continent currently threatened by financial Armageddon much as it was threatened with military Armageddon during WWII, a British Prime Minister remains the last defender of democracy. Who says history doesn’t repeat itself?
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