A “bailout” is a financial rescue program from the International Monetary Fund (IMF) to a troubled country. The IMF lends a country money to help them with balance-of-payment issues, severe fiscal deficits, foreign exchange devaluations and other economic crises. Bailed-out countries usually use the IMF money to pay for essential imports, meet foreign debt obligations and prop up their exchange rate when needed.
While IMF bailouts have their place in certain cases, they often have a negative impact on the economy of bailed-out countries. They often do not address the underlying fundamental problems like high expenditure slippages and corruption in governance systems. Instead, they focus on short-term austerity measures that may actually worsen the economy for the foreseeable future.
The IMF’s terms and conditions impose tough budget cuts, and they do not take into account the economic status and culture of a receiving country. They are also overly rigid, as they do not accommodate a country’s economic needs and the risks of its current policies.
Congress should think twice about giving the IMF even more of our tax dollars to play with. This kind of increase seems counter to the basic principles of sound money and promise keeping that the Pope has repeatedly emphasized in his writings. It is also against the principles of subsidiarity and the market economy that our faith teaches us to promote.
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