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The U.S. contributes far more modestly as part of the $39 billion financed by the International Monetary Fund. But the U.S. is the largest shareholder in the IMF, which some commentators and lawmakers have taken to mean the U.S. is forking over a lot of money, too.
"It is simply unfair, as a matter of principle, to force American taxpayers to use their hard-earned money to prop up failed policies in relatively wealthy nations," wrote Rep. Todd Tiahrt, a Kansas Republican, opposing any U.S. participation in a Greek bailout.
Washington, June 19 (DPA) The US Congress has approved a $106-billion spending bill that includes money for the wars in Iraq and Afghanistan and a loan to the International Monetary Fund (IMF).
The wide-ranging legislation includes money for foreign aid, preventing a flu pandemic and a “cash-for-clunkers” initiative that encourages consumers to trade in older, less efficient cars to help revive the auto industry.
The Senate passed the measure in a 91-5 vote Thursday. The lower House of Representatives approved the same bill 226-202 Tuesday, largely along partisan lines amid complaints from Republicans over the addition of items unrelated to the wars.
...The US will loan $100 billion to the IMF to help stabilise countries facing chronic budget shortfalls amid the ongoing financial crisis.
The G20 agreed to boost the IMF’s lending budget by $500 billion. The European Union, Japan, China and Brazil have also agreed to provide loans.
The legislation includes $5 billion in case of a partial default on the IMF loan. Nearly all Republicans in the House opposed the bill because of the IMF funding, deriding it as a “global bail-out”.
First, though all countries are theoretically responsible for investing in the IMF's lending pool, not all of them have currencies that potential borrowers can use. (Think of Zimbawean dollars or Venezeulan pesos.)
The IMF doesn't say that outright. Instead, it uses the concept of "usable resources," meaning it uses money from countries that are considered financially sound. About 21% of the quota contributions to the IMF were "non-usable," according to the IMF, as of January 2010.
Because the U.S., Japan and big European countries are in the "usable" camp, in reality, they finance a larger percentage of IMF funding than their quota would suggest.
But to arrive at an exact percentage isn't possible now for several reasons.
The IMF draws on funds that are pledged to it but that continue to be held in national central banks. At the end of April, before it loaned any of the $39 billion to Greece, the IMF estimated it could lend about $250 billion overall over the coming year.
...To make its loan, the IMF will borrow from the U.S. Federal Reserve and the other central banks it tapsand pay them interest of about 0.25% on the money; the IMF will then charge Greece about 3% on the loan.
Originally posted by Spinoza73
The US paying for the debt of Greece? Yes, as far as US Banks have loans to Greece. And as far as the US are indeed part of the IMF. The US are not the biggest debt owners in this case (which are Germany en France). Let's not forget Greece is a minor economy in Europe (smaller even than Portugal en Ireland). If this goes like domino and Spain would tend to go bankrupt, yes, than we get another, more bleak story.
To the OP: let's not forget where this mess started. The world (US tax payers included) has been paying dearly for the poker play in the US financial sector. Regulation is what is needed and Obama should get some support at it. But that's something only a few seem to agree on here at ATS. Horrible forum, what am I doing here!
Originally posted by FritosBBQTwist
reply to post by 911stinks
I have a question to you.
Do you consider the debt we have to China good or bad?
If you say bad, then why are you complaining about this, unless you think it is a lose-lose situation?