With An Imminent Irish Bailout Looming, One Politician Opposes US Participation In The Latest European Rescue
As the US, due to its key role as primary supporter of the various IMF rescue facilities, is already intimately involved in the Greek bailout (not to mention that the US Central Bank will soon again reprise its role as key lender of dollars, once the Irish crisis flares up again next week), there are those who are already calling to prevent the US from participating in yet another European bailout (second of many). The first person to have voiced this objection is Washington Congressmwoman Cathy McMorris Rogers, who in a just issued press release notes that she had warned the administration in April that a blank check for Europe would cause a “gathering storm." She is, of course, right. She will, of course, be ignored. We hope that politicians will gradually realize what traders have known for about two years - namely that courtesy of the Bernanke put, there is just no risk left, which means ever escalating bail outs until, one day, NASA will be sending out binary message to Alpha Centauri seeking the assistance of intelligent, and more importantly, rich, life to save the earth. Until then, the all in bet (with other people's money) will simply keep getting bigger.
From the issued release:
Congresswoman McMorris Rodgers Opposes U.S. Participation in Likely Ireland Bailout
Congresswoman Warned Administration in April That Blank Check for Europe Would Cause “Gathering Storm”
Washington, DC – Rep. Cathy McMorris Rodgers (R-WA), Vice Chair of the House Republican Conference, released the following statement after the Irish government opened negotiations with the International Monetary Fund (IMF) on a bailout which may cost over $80 billion. The U.S. is the largest contributor to the IMF, which has already committed $382 billion to bail out Greece and the European Union.
“All across America, people are suffering from bailout fatigue. In the past two years, we’ve spent hundreds of billions of dollars to bail out Wall Street, GM, Chrysler, Fannie Mae and Freddie Mac, and now we are being asked to contribute billions more to bail out Greece, Ireland, and other European nations which have spent and borrowed far beyond their means. At a time when America is already borrowing 40 cents of every dollar it spends, does it make sense for us to borrow more money (much of it from China) to help bailout Europe? A crisis caused by too much spending and borrowing will not be solved by more spending and borrowing. A ‘Euro-TARP’ is the wrong approach, and America should have no part in it.”
On March 24, 2010, Rep. McMorris Rodgers was the first Member of Congress to publicly oppose U.S. involvement in a European bailout – a bailout, which according to one leading IMF official – may cost U.S. officials between $50-100 billion or more. She called for the Obama Administration to vote against the Greek bailout at the IMF meeting and introduced a Congressional Resolution opposing the bailout.
In April 2010, she said, “The Obama Administration needs to understand that bailing out Greece will not solve Greece’s problems; it will only create a moral hazard that gets America more involved in the gathering storm of European bailouts…A Greek bailout today will encourage larger countries, such as Spain and Italy – which have similar problems – to get in line for American tax dollars tomorrow and continually delay the fiscal reforms that are necessary for a long-term recovery.” The growing likelihood of an Irish bailout confirms her diagnosis.