By Rick Manning — The financial news has been dominated over the past couple of years about problems that various European countries have had paying the interest on the loans they have taken out to finance their government’s deficit.
From Greece and Ireland to Spain and Italy, Americans have watched with detached interest as German Chancellor Angela Merkel has shuttled across the continent attempting to keep the euro aloft and by reworking finance deals for countries and the banks and governments which lend to them.
Now that the U.S. election is entering its final phase, U.S. Senators who are fighting for their political lives like Bob Casey (PA), Jon Tester (MT), Claire McCaskill (MO) and Sherrod Brown (OH) may be starting to wonder if a backlash from their part in bailing out the failed European socialist states might come back to haunt them.
In 2009, when President Obama pushed through the Cash for Clunkers boondoggle, it contained a little publicized program which gave the International Monetary Fund (IMF) a $100 billion line of credit directly from the U.S. Treasury to bail out failed economies.
While many of these politicians now rail against the greedy bankers on Wall Street, they voted again in 2011 to continue to allow Treasury Secretary Geithner to provide bailouts to countries which are only marginally worse off than our own economy. This is the secret that they hope to keep quiet from their voters through Nov. 6 — and is one which their opponents should exploit.
In the past two months, the Spanish government has been the latest that found itself in trouble due to having to pay a 6 percent interest rate on their debt. The Spanish government and indeed all of Europe are up in arms about what to do with a country whose economy is roughly the size of the state of California’s.
While Spain has not yet come to the IMF for a bailout, the international body has spent about $79.7 billion to bail out the banks which are owed money by sovereign slackers in Greece, Portugal, and Ireland — about $16 billion of which has come from U.S. taxpayers.
That $16 billion is tacked on to our nation’s trillion dollar plus annual Obama deficit. But what is difficult from many to comprehend is that the United States by many measures is actually in worse financial situation than Spain, a government predicted to be on the verge of financial collapse without intervention.
While Spain’s debt to Gross Domestic Product (GDP) ratio is 72 percent, the United States has gone from under 70 percent prior to Obama’s tenure in office to an astounding 102 percent, with projections showing our debt versus the total size of the economy continuing to explode over the next few years.
These facts give credence to concerns that while Spain, Greece, Ireland, Portugal and Italy are like drowning men flailing around looking for any help, the U.S. is more like a frog in a pot of water that is being heated — blissfully unaware that it is being gradually cooked until it is too late.
Bill Wilson, president of Americans for Limited Government called the Senators’ IMF votes “the height of irresponsibility, putting America at even greater financial risk in order to allow Treasury Secretary Timothy Geithner to play Santa Claus to the world through the IMF.”
Wilson asks, “When are Senators like Casey, Tester, McCaskill and Brown going to start putting American interests first, rather than those of the international bank cartel which finances and in many cases lobbies for, out of control spending, then when their risky investments come home to roost, they want to be bailed out?”
Perhaps the IMF’s blank check will be cancelled if vulnerable incumbents like Casey, Tester, McCaskill and Brown get handed a pink slip by voters demanding that America get its own fiscal house in order before lending money around the world so others might do the same.
Rick Manning is the Director of Communications for Americans for Limited Government. You can follow Rick on Twitter at @RManning957.