Stop Bailing Out Europe

European BailoutBy Howard Rich — Contrary to the rhetoric of our leaders, U.S. taxpayers are still subsidizing an ongoing bailout of the flailing Eurozone. This expansive financial commitment — components of which have been cleverly disguised as currency swaps — comes at a time when our country can least afford it.

Entering 2012, the federal government’s debt stood at roughly $15.2 trillion — an amount that is projected to climb to at least $16.4 trillion in the coming year. This will be the fifth consecutive year in which the federal government has spent more than $1 trillion in money that it didn’t have – and yet lawmakers in both parties are still refusing to make long-overdue cuts. Even worse, they’re still refusing to address the unsustainable entitlement excess that’s fueling this soaring debt.

In such an environment Washington simply cannot afford to pump more taxpayer money into bailouts at home or abroad — whether through loans, direct appropriations or clever “liquidity swaps” like the one exposed recently by Gerald O’Driscoll of the Cato Institute.

“The Fed is, working through the ECB, bailing out European banks and, indirectly, spendthrift European governments,” O’Driscoll wrote, noting that these swaps are nothing but thinly-veiled loans that the Federal Reserve has no authority to make.

Such opaqueness and hypocrisy is commonplace coming from this administration. Two months ago, White House spokesman Jay Carney told reporters that “we do not in any way believe that additional resources are required from the United States and from taxpayers” to prop up the Eurozone.  Hours later, however, Barack Obama emerged from a meeting with European leaders pledging that America would “do our part to help them resolve this issue.”

“Our part?”

From Dec. 1, 2007 to July 21, 2010, the Federal Reserve doled out more than $3 trillion in loans to European banks — constitutionally-dubious financial transactions that would have remained hidden forever were it not for the courage of several fiscally conservative lawmakers in forcing an audit of the Fed. In addition to these loans, the Fed also printed $442.7 billion out of thin air to cover foreign losses on toxic mortgage-backed securities here in America.

Taxpayers have also directly subsidized tens of billions of dollars in direct bailout payments through the International Monetary Fund — with the Obama administration hoping to spend billions more.

Assuming that a bailout of European banks was our responsibility (which it isn’t), America has clearly done “its part” — and then some. Of course all that these efforts have produced is a continent that’s deeper in debt and a Eurozone economy that’s choking under the strain of that debt.

The insanity must stop. The European debt crisis should have been a warning to heed, not an invitation to squander even more tax money.

Even if America had the resources to bail out Europe, it’s not our job to do so. Besides, U.S. taxpayers know all too well the futility of such interventionist approaches as domestic bailouts that were supposed to keep America’s unemployment rate below eight percent have instead kept it above eight percent for 34 consecutive months. As a result 146.4 million Americans — or 48 percent of the population — are currently classified as poor or low-income according to Census data released last month.

In Europe, the bailout culture has had a similar “de-stimulating” effect.

“The euro zone is expected to undergo a short recession with GDP declining around the turn of the year and stagnating in Q2 2012,” several leading European economic institutes warned this month. “Household consumption will be held back by fiscal consolidation and deteriorating labour market conditions.”

This contraction will be particularly pronounced in Greece, where numerous job-crippling tax hikes were enacted in lieu of additional government “austerity” measures as a condition of the country receiving its first bailout. Due to this contraction, the €130 billion ($163 billion) projected in October for Greece’s new bailout is likely to cost much more than that — and Greece is just the first in a long line of sovereign dominoes that the Eurozone must prop up.

In their much-ballyhooed “Pledge to America” two years ago, Congressional Republicans promised they would “end bailouts permanently.” That obviously hasn’t happened — but putting a stop to the ongoing European bailout would be a great place to start living up to that promise.

The author is chairman of Americans for Limited Government.

This article has 11 comments
  • Anonymous 23.01.2012 3:36 PM

    There is so much wrong with all of our leader right now.  If only a few of them had any guts they would cut this imposters spending and start cutting programs that he has initiated and take                  away  the imposters  “Blank  Checks”  so he won’t be able to give money to failing renewable energy companies.

  • Witnwisdom7 23.01.2012 3:36 PM

    Get us off this sinking ship, 2002 warnings to congress came true:http://www.youtube.com/watch?v=ifJG_oFFDK0Israel & CIA agree on foreign policy candidate, guess who?https://www.youtube.com/watch?v=CnH0dxdiRzc&feature=player_embedded

  • Witnwisdom7 23.01.2012 3:38 PM

    Israel & CIA agree on foreign policy candidate, guess who?https://www.youtube.com/watch?v=CnH0dxdiRzc&feature=player_embedded

  • Anonymous 23.01.2012 3:54 PM

    I agree, I would stop giving foreign aid as of yesterday.  You can’t buy friendship or allies, that is why I would support Isreal, a real friend.  I wish the USA had a President half as good as Prime Minister Benjamin Netenyaho.

  • Paul J. Moragne 23.01.2012 4:24 PM

    The American people need the bailouts in the form of lower taxes that we use to fund these bailouts.

  • Constitutional Believers 23.01.2012 6:14 PM

    Within the news every day, we see so many unconstitutional governmental regulations, tyrannical unconstitutional laws being written into existence, manmade and/or natural occurrences that are crippling our energy industries, our economy, job creation and now affecting our food supplies. With news form the internet media reporting about Tyrannical Factional Groups being molded together by progressive organizers to
    fundamentally change this Great (United States of America) Nation of ours into,
    either an Islamic Caliphate or a North American Union to mimic their idea of a
    European Utopian Socialistic Country. Their model of such One World or New
    World Order is collapsing in Europe and requiring massive taxpayer bail outs!  
    It Is Time Once Again, in this Great Nation For All Good Men and Women To Come To The Aid of Our Country! Info: http://www.wakeupamerica.com/constitutionalbelievers
    If We Don’ WAKE UP AMERICA Now!!!
    This Is Our Future Now! http://www.infowars.com/government-censors-document-revealing-plans-to-wage-war-on-americans/  
    This Future is already here! http://www.youtube.com/watch?v=U6nchQl9JDg&feature=bulletin
    America is on the precipice of demise! http://www.inflation.us/videos.html
    Help WAKE UP AMERICA Now!!!
    Take Care and GOD BLESS!
    Sincerely
    Mr. Harris
    ConstitutionalBelievers@hot.rr.com

  • Robert Osborn 23.01.2012 6:43 PM

    The best way to start the process is the way Iceland did it, the President of Iceland put it to a vote to the people of Iceland whether the Icelandic Central Banks would be able to receive a bailout from the people of Iceland or go under, the President over-rode it’s Parlaments decision of bailing out the Icelandic Central bank and allowed the people of Iceland to vote on and decide if they wanted to bail out their Central Bank. The people of Iceland decided to allow their Central Bank to fail and go under. A year later, Iceland is now prospering from their decision. We The People should also be able to vote on bailing out  banks throught the world and especially our own banks here in the united states or allow them to fail. If we alloowed them to fail because of their own bad business or investment decisions then the United States would also be in much better financial shape. These bad business decisions is what Ron Paul calls Malinvestment that needs to be liquidated and gotten rid of. If the banks fail because of their own bad business decisions that is their fault not the fault of the American people. We after all did not make these bad investment decisions and we should not have to pay for their bad mistakes of bankers or other investors. 

  • RMILLER26 23.01.2012 7:27 PM

    But when you have an avowed Marxist in the White House intent on destroying this country, why would you expect anything different?

  • Anonymous 30.01.2012 7:58 PM

    We should stop subsidizing all these countries around the world.  We borrow money from China and turn around and give them millions in aid for their floods.  B/S!!!  Egypt has prevented several Americans from leaving the country, yet we send them a billion dollars every year.  B/S!!!  How can we ever balance our budget and get out of debt when this Ahole Obama sends all our tax money to his butt licking buddies.  Kick his socialist ass out and get a real American in the White House as well as the Senate and House of Representatives.  If we could get rid of these bleeding heart liberals we could bring jobs back to America and breath life back into this country. 

  • Anonymous 30.01.2012 8:05 PM

    What this country needs is a flat tax of about 15% to 17%.  No deductions which would mean that Romney would pay the same tax on all his millions as me.  Anybody earning under a certain amount would pay no income tax.  Of course, a person would be able to deduct his mortgage interest as they do not.  There would be no Capital Gains tax either.  I believe that this is the only fair way to handle income taxes and to close all the loopholes that people like Romney use to circumvent paying their share. 

  • Josie James 11.12.2012 10:06 PM

    We need max keiser to help us throw the banksters and politicians out of America NOW!

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