It Get's Worse

[La_Dolce_Vita]

It would be a bigger risk not to take money from the IMF.

 

The grim reaper will do his work eventually.

 

S

 

Where else willl the money come from? Think you are right.

[cheesemonster2005]

Aren't the grim reaper and the IMF one and the same? They're a bunch of country-fucking-up bastards.

[Chinahand]

First things first - greetings Cheesemonster - we haven't heard from you for a long while - is this just one of your occassional poppings-in, or are you going to be adding your provocative and interesting views on a more regular basis?!

 

Secondly - I really think you are being, how should I put it - emotional, about the IMF.

 

When a major economy's government tries to spend more than it earns and no one else will lend the hard earned cash to them to do it - who steps in to give them this cash? The IMF. If it didn't give the money the government would go bankrupt and not only destroy all confidence in itself and the banking and other institutions it backs, but more than likely, the savings and prospects of the country's population by printing paper money - Zimbabwe is a good example of this, others were Germany in the 1930s, and pre-revolutionary China in the 1940's.

 

Now I agree the IMF doesn't just hand over the cash and says to the government spend it on whatever you want. No, there are conditions and those conditions hurt - if you lived in South Korea in the late 1990s or Argenitina, or Mexico you'd have reason to remember the pains you'd had to go through as your economies got back on track after the IMF had had to step in because your governments were bankrupt.

 

But MOST of that mess wasn't the fault of the IMF - it was the fault of the governments in the first place trying to spend more than they earned, until no one would lend them the cash. The IMF is there trying to solve that mess - they MAY cause some additional problems as they clear up the mess, but that is a second order effect compared to the original problems.

 

And look at those countries now - are they collapsed economies with no hope of redemption, or dictatorships where a strong man has stepped in and used violence to fix the problems as they arbitarily wished? No, they are democracies well able to contribute to this world.

 

I find the left wing romance against the IMF and similar world bodies amazing - what are the alternatives when a government takes too much of a country's money, then borrows even more from abroad and then wastes it away? Should the population be left to just sink? Or should the IMF step in and lend the money, but only on the condition that the government reforms and spends the money lent to it wisely?

 

Cheesemonster - name the countries f***ed up by the IMF if you please? Or are you just spouting?

[La_Dolce_Vita]

I find the left wing romance against the IMF and similar world bodies amazing - what are the alternatives when a government takes too much of a country's money, then borrows even more from abroad and then wastes it away? Should the population be left to just sink? Or should the IMF step in and lend the money, but only on the condition that the government reforms and spends the money lent to it wisely?

 

Cheesemonster - name the countries f***ed up by the IMF if you please? Or are you just spouting?

 

Chinahand, I was of the understanding though that the World Bank and IMF only lend money unless the recipients remove all tarriffs and protection measures. I thought the complaints from the left and those who criticise the Americans and EU is that the removal of tarriffs only leaves the small industries of the poorer nations with little ability to compete against the West.

 

I did have a little read on the net about the world bank, but still none the wiser, can Zimbabwe request funds from the World Bank just as it would the International Monetary Fund?

[cheesemonster2005]

First things first - greetings Cheesemonster - we haven't heard from you for a long while - is this just one of your occassional poppings-in, or are you going to be adding your provocative and interesting views on a more regular basis?!

 

Secondly - I really think you are being, how should I put it - emotional, about the IMF.

 

When a major economy's government tries to spend more than it earns and no one else will lend the hard earned cash to them to do it - who steps in to give them this cash? The IMF. If it didn't give the money the government would go bankrupt and not only destroy all confidence in itself and the banking and other institutions it backs, but more than likely, the savings and prospects of the country's population by printing paper money - Zimbabwe is a good example of this, others were Germany in the 1930s, and pre-revolutionary China in the 1940's.

 

Now I agree the IMF doesn't just hand over the cash and says to the government spend it on whatever you want. No, there are conditions and those conditions hurt - if you lived in South Korea in the late 1990s or Argenitina, or Mexico you'd have reason to remember the pains you'd had to go through as your economies got back on track after the IMF had had to step in because your governments were bankrupt.

 

But MOST of that mess wasn't the fault of the IMF - it was the fault of the governments in the first place trying to spend more than they earned, until no one would lend them the cash. The IMF is there trying to solve that mess - they MAY cause some additional problems as they clear up the mess, but that is a second order effect compared to the original problems.

 

And look at those countries now - are they collapsed economies with no hope of redemption, or dictatorships where a strong man has stepped in and used violence to fix the problems as they arbitarily wished? No, they are democracies well able to contribute to this world.

 

I find the left wing romance against the IMF and similar world bodies amazing - what are the alternatives when a government takes too much of a country's money, then borrows even more from abroad and then wastes it away? Should the population be left to just sink? Or should the IMF step in and lend the money, but only on the condition that the government reforms and spends the money lent to it wisely?

 

Cheesemonster - name the countries f***ed up by the IMF if you please? Or are you just spouting?

 

Thanks for the welcome or welcome back Chinahand. I can see that you know a fair bit about the IMF and I understand that it is their duty to guide governments and try to solve the mess that a country has got itself into. I just feel that many of their conditions attached to the loans are too severe and affect the lives of individuals very much. Additionally the IMF seems to be guided by economic philosophy that I generally don't agree with - namely that it seeks privatisation of industries, less government interference and cuts to public spending. I feel that even many Conservative people would agree that a bit more government control and 'interference' is needed in light of the recent economic crisis and at a time when even the USA has nationalized companies.

 

I would regard Argentina as an example of a country the IMF has a hand in fucking up although now they seem to have recovered well. Part of Argentina's conditions for the loan were the revaluing of its currency (reducing people's effective wealth by two-thirds but not affecting the rich who were able to keep money in dollars off-shore), the restrictions on money withdrawals, cuts in education, pensions and health by the federal government and the instructions for further privatisation. Almost 2 decades after one Argentinian government privatized the railways (but not at a time when seeking IMF loans) the only railways that exist in Argentina are commuter lines which run near the federal capital and a few other big cities - the great railways that Britain helped develop in Argentina are now crumbling and deserted.

 

But you are definitely right that a lot of the blame should be laid with the government which got the country into such a state in the first place!

[La_Dolce_Vita]

I find the left wing romance against the IMF and similar world bodies amazing - what are the alternatives when a government takes too much of a country's money, then borrows even more from abroad and then wastes it away? Should the population be left to just sink? Or should the IMF step in and lend the money, but only on the condition that the government reforms and spends the money lent to it wisely?

 

Cheesemonster - name the countries f***ed up by the IMF if you please? Or are you just spouting?

 

But the left-wing objection, as well as those mentioned by Cheesemonster, viz. privatisation of industries, reduced public spending, etc., is the issue of who pays back the loan. Now as far as I am aware, it is was workers of the country that pay back the loan. My problem with that is that THEY were not in debt, they were not the ones who made the policy decisions and frittered their money away, it was the elites. And in taking a loan, it is their loan, not the people's so why are they required to pay it back? It is theft and it is also leads to the people of that nation having to live in further impoverishment because of the need to pay back debt.

 

What is worse is that, from my understanding, the loans are originally funded by the taxpayers. Why should fund it? Seems like another example of robbery.

 

It just seems to demonstrate such a complete lack of democracy and serves the interests of nobody but investors and the elites in the West and in the impoverished countries.

[Sebrof]

My problem with that is that THEY were not in debt, they were not the ones who made the policy decisions and frittered their money away, it was the elites.

 

It was the proles who voted in the government. And government debt IS the people's debt.

 

S

[La_Dolce_Vita]

My problem with that is that THEY were not in debt, they were not the ones who made the policy decisions and frittered their money away, it was the elites.

 

It was the proles who voted in the government. And government debt IS the people's debt.

 

S

 

Wow, now that is liberal democratic but not very capitalist at all! Debt is not a economic issue, you shunt it on the people and it shows how truly ideological the matter is.

 

Regardless of the fact that people vote in a 'democracy' the government is only representative. It does not reflect their interests, however, and that is the same in no matter what 'democracy' we talk about. Voting is just ratification of which members of the elite come to power or which people will become the ruling class. And voting does mark a free country.

Government is not the people. Can it really be said in the case of Zimbabwe that the government operates in the interests of its people? No. It operated to satisfy the interests of military and business elites.

 

Now if these elites make bad decisions and take risks as capitalists tend to do but things go tits up, why should it be the people's problem? No decisionmaking has come from the people on the issue of government spending and the people would certainly not have condoned the manner in which was undertaken.

 

But the IMF hands over this loan and in a very non-capitalist manner says that the people should pay up, even though they did not take out the loan and did not get themselves in this bother in the first place. Saddled with payments and interest the people end up paying off this loan regardless of how much hardship this causes. But if capitalist values really operated and the people could not pay, and the government had to default then that is the IMF's problem. This does not happen, the government is pressurized to introduce austerity programmes to drum up the funds.

 

This is the problem because the debt is ideological. The idea of Third World Debt is just a concept that serves the West is having control over the poorer nations.

[Sebrof]

Zim has now abandoned its own currrency. Foreign currency is now officially accepted for local transactions.

 

S

[La_Dolce_Vita]

Zim has now abandoned its own currrency. Foreign currency is now officially accepted for local transactions.

 

S

 

But would that mean the Rand, the Dollar, or the Euro? Or does the currency depend on what is being transacted?

[Sebrof]

Zim has now abandoned its own currrency. Foreign currency is now officially accepted for local transactions.

 

S

 

But would that mean the Rand, the Dollar, or the Euro? Or does the currency depend on what is being transacted?

 

Whatever you like. Chiefly Rand and dollar.

 

S

[cheesemonster2005]

My problem with that is that THEY were not in debt, they were not the ones who made the policy decisions and frittered their money away, it was the elites.

 

It was the proles who voted in the government. And government debt IS the people's debt.

 

S

 

Well in the case of Argentina the proles didn't vote in the government that created the problem. Most of the problems were caused by the military junta which ruled from the late 70s until after the Falklands/Malvinas war. The military continued to waste money on special projects, fund military campaigns that they knew they'd lose and spend billions on survelience of the people. No government in the 20 years after the return of democracy stood a chance of sorting the mess out.

[cheesemonster2005]

Zim has now abandoned its own currrency. Foreign currency is now officially accepted for local transactions.

 

S

 

But would that mean the Rand, the Dollar, or the Euro? Or does the currency depend on what is being transacted?

 

I believe that it means that businesses are now free to accept payment in any currency they wish (before today this was forbidden as it is in most countries). I'd imagine that the Rand or Euro would be the most widely used. This decision may go some way to sorting out the problems with hyper-inflation but it will not solve the heart of the problems facing Zimbabwe.

[Sebrof]

My problem with that is that THEY were not in debt, they were not the ones who made the policy decisions and frittered their money away, it was the elites.

 

It was the proles who voted in the government. And government debt IS the people's debt.

 

S

 

Well in the case of Argentina the proles didn't vote in the government that created the problem. Most of the problems were caused by the military junta which ruled from the late 70s until after the Falklands/Malvinas war. The military continued to waste money on special projects, fund military campaigns that they knew they'd lose and spend billions on survelience of the people. No government in the 20 years after the return of democracy stood a chance of sorting the mess out.

 

Twenty years is a long time.

 

S

[La_Dolce_Vita]

My problem with that is that THEY were not in debt, they were not the ones who made the policy decisions and frittered their money away, it was the elites.

 

It was the proles who voted in the government. And government debt IS the people's debt.

 

S

 

Well in the case of Argentina the proles didn't vote in the government that created the problem. Most of the problems were caused by the military junta which ruled from the late 70s until after the Falklands/Malvinas war. The military continued to waste money on special projects, fund military campaigns that they knew they'd lose and spend billions on survelience of the people. No government in the 20 years after the return of democracy stood a chance of sorting the mess out.

 

Twenty years is a long time.

 

S

 

And I believe it was Argentina, or maybe Brazil, who did took a loan but then told the IMF after some time that they would not pay it back given the conditions that were imposed since it's acceptance, which really pissed off the American government (which is pretty much the same as the IMF)