Here’s a shocking story from Matthew Boyle of the Daily Caller.
When California Democratic Rep. Nancy Pelosi was the Speaker of the House in 2009, President Barack Obama and congressional Democrats authorized $100 billion in spending as a line of credit for the International Monetary Fund to be used in times of emergency — funds that could now be used to bail out European banks.
As the Eurozone takes a turn for the worse and chatter heats up about more European Union and IMF bailouts across the continent, Republicans in Congress are pushing to rescind the $100 billion set-aside.
That $100 billion is an addition to the $64.4 billion the U.S. Treasury will provide in quotas to the IMF this year. That new funding has not been formally appropriated, but the IMF could request the money whenever it pleases.
[...]McMorris Rodgers is leading the charge, with more than 80 House Republicans, to rescind that line of credit before the IMF takes any more of it. She told TheDC that IMF officials confirmed to her that about $6 billion of the $100 billion has been used to help bail out Portugal, as well as St. Kitts and Nevis, a small Caribbean country.
[...]Europe has fallen into dire financial straits as of late. Just last week, the continent saw several of its countries hit with credit downgrades. Though Greece has received the most attention, McMorris Rodgers warns that Greece is just the beginning of what could be a larger and more out-of-control downward European spiral.
“I think it’s important to recognize that Greece — all the eyes have been on Greece — Greece is a relatively small country,” she said. “You’re talking two percent of the European Union, 11 million people, and yet there’s already been over $300 billion in bailout funds made available to Greece through the European Union and the IMF. That’s more than their entire GDP.
“So, if they [the EU and the IMF] were to continue down that trend, the amount of money we could be talking about is just off the charts.”
As vice chair of the House Republican Caucus, McMorris Rodgers is the highest-ranking Republican woman in Congress. She has sponsored a bill that would rescind the extra bailout funds and use them for deficit reduction. South Carolina Republican Sen. Jim DeMint has already gathered more than 20 co-sponsors for the Senate’s version of the legislation.
The U.S. Treasury ordinarily has about $65 billion set aside for international banking emergencies, an IMF credit line that’s already been tapped. Without any approval from Congress, Geithner promised the IMF in an official statement that he plans to double that $65 billion quota.
“Our current quota is about $65 billion and now, so, that raises the question: ‘How are you going to pay for that [doubled quota], Mr. Secretary?’” McMorris Rodgers said.
Bailing out the EU? But we have our own debts to worry about.
Thanks to Obama’s trillion-dollar deficits in 2009, 2010 and 2011, the United States’ gross debt is now more than our GDP. After Obama gets his $1.2 trillion debt limit extension approved, our new credit limit will be $16.3 trillion – which is 107% of our annual GDP. When Obama took office, our debt was at $8 trillion.
How bad is bad?
Greece’s debt to GDP ratio is about 160%, which is higher than America’s 107% ratio – but ours is rising. We can look at Greece and see what is in our future if we don’t fix things now.
USA Today explains how this debt crisis is affecting ordinary Greek citizens.
Unable to pay off its loans, Greece has been forced to slash its spending and public benefits, raise taxes and rely on bailouts from the wealthier EU nations. Though its new prime minister says the country has a pathway to recovery, Greeks say they aren’t hopeful about a change in their lives anytime soon.
Higher taxes, high unemployment and little economic growth added to reductions in services and pensions that have been part of the attempted solution to Greece’s financial ills have forced people to the brink who have never been there. Greeks have been taking to the streets to protest the changes. The government this week said that 1,580 demonstrations had been held in Athens this year.
“After 34 years of work, I can’t get a pension; I need at least four more years of work,” Katsikadakos said. “Plus, I have to pay 450 euros every month to the state for health insurance and social security, just because I own a company, even when I have zero income.”
About 183,000 businesses will shut down by summer, according to a new study from the General Confederation of Professional Craftsmen. The study expects that 100,000 of those will close in the next month or two, leaving hundreds of thousands of people jobless.
One out of four small- and medium-size-business owners say it’s possible they’ll declare bankruptcy in the next year, according to a recent state survey. If true, it would mean 320,000 lost jobs.
[...]Taxes to pay for the public sector and an expensive pension system have been high. Three new taxes have been added since 2009: a self-employment tax of 300 to 500 euros, a solidarity tax of about 1% to 5% of one’s income and a real estate tax.
This is bad, but what is worse is the effect of this debt crisis on young people in Greece – they are the real victims of their parents’ pattern of voting for the Greek socialist party over and over and over again - with predictable results. Youth unemployment in Greece is now near 50%. The young people are the ones who are having their futures ruined because of the voting choices of their parents.