Abolish The IMF

IMF: Affirmative Extension
2012-2013
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IMF Reform 2ac

OPENERS:..................................................................................................................................................2
TOPICALITY:.............................................................................................................................................4
INHERENCY:.............................................................................................................................................6
1. Mission/Purpose..................................................................................................................................6
2. Definitions...........................................................................................................................................8
3. Functionality........................................................................................................................................9
4. Current Lending power..........................................................................................................................10
SIGNIFICANCE:.......................................................................................................................................11
1. Failure to prevent/Bad advice............................................................................................................11
2. Encourages Recklessness Behavior (Moral Hazard).........................................................................13
3. Counterproductive Economically......................................................................................................17
4. Fosters Dependency...........................................................................................................................20
5. Taxpayers stuck paying......................................................................................................................21
6. Funding Elitists..................................................................................................................................24
7. Bailout Mentality...............................................................................................................................25
8. Lack of Enforcement........................................................................................................................27
10. Unaccountable/ not transparent.......................................................................................................28
SOLVENCY:..............................................................................................................................................29
1 . Advocacy..........................................................................................................................................29
2. Alternatives to bailouts......................................................................................................................31
Examples of Failures.................................................................................................................................32
1.
Greece.............................................................................................................................................32
2.
Other...............................................................................................................................................34
A2: Loans foster Growth........................................................................................................................37

A2: IMF promotes Democracy..............................................................................................................39
A2: IMF Surveillance.............................................................................................................................40
A2: Keeps countries from defaulting.....................................................................................................42
A2: Lost Jobs..........................................................................................................................................43
A2: Lost Lender of Last Resort..............................................................................................................43
A2: Conditionality will solve.................................................................................................................44
A2: Countries get paid...........................................................................................................................44
Source Indictments....................................................................................................................................45
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OPENERS:
"Capitalism without failure is like religion without sin. It doesn't work" ~Allan Meltzer
IMF is ineffective
Terry Miller 2009. (former ambassador to the United Nations Economic and Social Council; former
Deputy Assistant Secretary of State for Economic and Global Issues) A Trillion Dollars of Smoke and Mirrors April
3, 2009 http://blog.heritage.org/2009/04/03/a-trillion-dollars-of-smoke-and-mirrors/
The IMF has staggered from financial crisis to financial crisis over the past few decades earning ever poorer
marks. Few recipients of IMF assistance have had kind words for the organization after receiving IMF help.
True, countries often ignore sound advice from the IMF, but being ineffective and ignored by recipient
countries is not a convincing reason to give the organization hundreds of billions of new dollars.
Bad movie
Allan H. Meltzer (Ph.D in economics from UCLA. He has been a member of the President's Economic Policy
Advisory Board, an acting member of the President's Council of Economic Advisers, & a consultant to the U.S. Treasury
Department & the Board of Governors of the Federal Reserve System. In 1999 & 2000, he served as the chairman of the
International Financial Institution Advisory Commission, which was appointed by Congress to review the role of the
International Monetary Fund, the World Bank, & other institutions) The Review of International Organizations [Volume 6,
Issue 3-4]"The IMF returns" September 2011
It was like a scene from a bad movie. To cheers, the International Monetary Fund (IMF) and the
European Union rode in to rescue the Euro, Europe, and Greece in time for the market opening on
Monday. Alas, the IMFs analysis was wrong, and the rescue did not occur. By Tuesday, markets saw
that the analysis was flawed, the main problems remained, and the IMF and EU loans would not solve
the problems in Greece, Portugal and Spain.
Tired old Dinosaur
Erik Kain (journalist) Forbes News (a leading Internet media company, is among the most trusted resources for the
world's business & investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools &
real-time reporting they need to succeed at work, profit from investing & have fun with the rewards of winning) May 20,
2011 http://www.forbes.com/sites/erikkain/2011/05/20/should-we-abolish-the-imf/
The IMF is a tired old dinosaur of an institution, wholly under the thumb of European bureaucrats
while largely reliant on U.S. tax dollars. Its mission seems to be little more than paving the way for
international corporations entrance into various developing nations. It is the crudest sort of technocratic
corporate welfare masquerading as international development. And the nations at the receiving end of
the IMFs largesse are quickly placed under the iron thumb of the lender nations.
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A Problematic Institution
Roberto Frenkel (Principal Research Associate at the Centro de Estudios de Estado y Sociedad (CEDES) in Buenos Aires
& Professor at the Universidad de Buenos Aires He specializes in macroeconomics, finance, & development, &
has published numerous articles & books He has worked as a consultant for international organizations, including the
United Nations, as well as the governments of Argentina & other Latin American countries) Friedrich-Ebert-Stiftung (The
Friedrich-Ebert-Stiftung is a non-profit German political foundation committed to the advancement of public policy issues in
the spirit of the basic values of social democracy through education, research, & international cooperation) "Current
Problems with the IMF and Challenges Ahead A Latin American Perspective" December 2007
http://library.fes.de/pdf-files/iez/global/05126.pdf
There is broad consensus around the idea that the International Monetary Fund is currently a problematic
institution. A brief enumeration of the principal, commonly perceived problems would, at the very least, include the
following: 1) the institution is no longer fulfilling the functions it used to fulfill, nor is there a clear vision of any new
functions for it; 2) due to a drastic pruning of its loan operations, it is not receiving enough revenue to cover its operating
costs; 3) the IMF has not played a notable role in the debate about global imbalances, even though this issue is at the very
heart of its institutional remit; 4) it is suffering a crisis of legitimacy, with its power structure questioned by many members;
5) there is a lack of confidence, from quite different perspectives, in its intellectual orientation and the quality of its policy
recommendations.
Obsolete organization
John Bolton (Former US Ambassador to the United Nations, BA & JD from Yale University He was formerly the
Senior Vice President for Public Policy Research at the American Enterprise Institute From 1989-1993, Bolton was the
Assistant Secretary for International Organization Affairs at the Department of State, following his term as the Assistant
Attorney General at the Department of Justice from 1985-1989 From 2001-2005, Bolton was also the Undersecretary of
State for Arms Control & International Security) "Europe's IMF game: Playing Uncle Sam for sucker" June 21, 2011
http://www.nypost.com/p/news/opinion/opedcolumnists/europe_imf_game_1Lik759jtV35U1yDpnKj0I
In fact, it is again time to ask why the IMF continues to exist at all. In 1998, former Treasury Secretaries
George Shultz and William Simon and former Citicorp Chairman Walter Wriston argued that the IMF
should be abolished. Writing amid the Asian financial crisis, they criticized country bailout effortswarning that,
further bailouts, unprecedented in scope, will follow. Finding the IMF ineffective, unnecessary and obsolete,
they argued that Congress should give it no further funds. Shultz later observed that major governments
have used the [World] Bank and the IMF to sponsor activities favored by government officials whose own
taxpayers would not foot the bill. Exactly the point today.
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TOPICALITY:
A. IMF part of the United nations
IMF Website, August 22, 2012
http://www.imf.org/external/np/exr/facts/imfwb.htm
The IMF and the World Bank are institutions in the United Nations system . They share the same goal of raising
living standards in their member countries. Their approaches to this goal are complementary, with the IMF focusing on
macroeconomic issues and the World Bank concentrating on longterm economic development and poverty reduction.
B. Cambridge Definition
Cambridge online dictionary (Cambridge University Press has been publishing dictionaries for learners of English
since 1995) http://dictionary.cambridge.org/dictionary/british/the-imf
the International Monetary Fund: a part of the United Nations which encourages international trade and gives
financial help to poor countries.
C. Coordinate through the Economic and Social Council

United Nations Environment Programme. United Nations Specialised Agencies versus United Nations
Programmes Note by the Executive Director to the Consultative Group of Ministers or High-level Representatives on
Broader International Environmental Governance Reform. June 7, 2010
The Bretton Woods Institutions, the World Bank (WB) International Monetary Fund (IMF) and
International Bank of Reconstruction and Development (IBRD), were established in 1944 before the establishment of the UN
system and are often regarded as completely independent of the UN. While it is true that the influence the UN has on the
Bretton Woods Institutions has been guarded by some governments and the influence the UN has had over the institutions has
been less compared to the other specialised agencies, the Bretton Woods Institutions are technically considered to be
specialised agencies and they do coordinate their activities through the ECOSOC [United Nations
Economic and Social Council].

D. Reports to Economic and Social Council
United Nations Global Marketplace Website, (The United Nations Global Marketplace - UNGM - is the
procurement portal of the UN System. It brings together UN procurement staff and the supplier community. The United
Nations represents a global market of over USD 14 billion annually for all types of goods and services.) UN System of
Organizations Accessed December 10, 2012 https://www.ungm.org/Info/Organization.aspx
The specialized agencies, a term first used in the United Nations Charter which provides for
international action to promote economic and social progress, report to the Economic and Social
Council. These specialized agencies work in the economic, social, scientific and tech-nical fields and possess their own
legislative and executive bodies, their own secretariats and their own budgets.
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E. System = U.N.
The Food and Agriculture Organization of the United Nations website, United Nations System Accessed
December 10, 2012 http://www.fao.org/partnerships/fao-partnerships/the-un-system/en/
The United Nations is a family of organizations. Also known as the United Nations system, it is made
up of the United Nations Secretariat, the United Nations programmes and funds, and the UN specialized
agencies. The programmes, funds and agencies have their own governing bodies and budgets, and set their own standards
and guidelines. Together, they provide technical assistance and other forms of practical help in virtually all areas of economic
and social endeavour.
The IMF/World Bank are part of the UN- IMF website

International Monetary Fund, August 22nd 2012, Factsheet: The IMF and the World Bank
http://www.imf.org/external/np/exr/facts/imfwb.htm
The IMF and the World Bank are institutions in the United Nations system. They share the same goal
of raising living standards in their member countries. Their approaches to this goal are complementary,
with the IMF focusing on macroeconomic issues and the World Bank concentrating on long-term
economic development and poverty reduction.
Explanation of the relationship between the IMF and the UN
G. Edward Griffin (writer and documentary film producer; B.A. in speech and communications from the
University of Michigan; former Sergeant in the United States Army; Certified Financial Planner from
the College of Financial Planning; founder of the Freedom Force International; recipient of the coveted
Telly Award for excellence in television production; contributing editor for The New American
magazine; creator of The Reality Zone Audio Archives; President of American Media; ), September,
2010, The Creature from Jekyll Island: A Second Look at the Federal Reserve, Published by American
Media
The International Monetary Fund appears to be a part of the United Nations, much as the Federal
Reserve System appears to be a part of the United States government, but it is entirely independent. It is
funded on a quota basis by its member nations, almost two hundred in number. The greatest share of capital,
however, comes from the more highly industrialized nations such as Great Britain, Japan, France, and Germany. The United
States contributes the most, at about twenty per cent of the total. In reality, that twenty per cent represents about twice as
much as the number indicates, because most of the other nations contribute worthless currencies which no one wants. The
world prefers dollars.
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INHERENCY:
1. Mission/Purpose
A. Original Mission
Matt Kibbe (President & CEO of FreedomWorks, a conservative non-profit organization based in Washington D.C.
B.A. in Economics; He served as Chief of Staff & House Budget Committee Associate for U.S. Representative Dan Miller (RFL); Director of Federal Budget Policy for the U.S. Chamber of Commerce; Senior Economist for the Republican National
Committee during Lee Atwater's tenure as Chairman) Forbes Magazine (What Has The IMF Done With Our
Money") January 26, 2011
http://www.forbes.com/2011/01/24/imf-taxpayers-greece-opinions-contributors-matt-kibbe.html
The original mission of the IMF was to temporarily assist nations with shortterm balance of payments problems
under the Bretton Woods system. When that system of fixed exchange rates fell apart in the early 1970s, the IMF
had no justification to continue. Instead of closing down, the fund simply redefined its mission.
b. Original Mission
Roberto Frenkel (Principal Research Associate at the Centro de Estudios de Estado y Sociedad (CEDES) in Buenos Aires
& Professor at the Universidad de Buenos Aires He specializes in macroeconomics, finance, & development, &
has published numerous articles & books He has worked as a consultant for international organizations, including the
United Nations, as well as the governments of Argentina & other Latin American countries) Friedrich-Ebert-Stiftung (The
Friedrich-Ebert-Stiftung is a non-profit German political foundation committed to the advancement of public policy issues in
the spirit of the basic values of social democracy through education, research, & international cooperation) "Current
Problems with the IMF and Challenges Ahead A Latin American Perspective" December 2007
http://library.fes.de/pdf-files/iez/global/05126.pdf
The IMF was originally conceived as an international institution to complement the fixed exchange rate
agreement of 1945. It was supposed to provide shortterm finance to palliate any measures needed to correct
wobbles in the balance of payments and to encourage autonomous national macroeconomic policies. The active
parties to this agreement were the United States and the European countries. The original design did not take
account (and this would have been difficult) of developing economies.
C. Current Role
Rebecca Nelson (Analyst in International Trade and Finance), Dick Kanto (Specialist in Industry and Trade),
Jonathan Sanford (Specialist in International Trade and Finance) Martin Weiss (Specialist in International Trade and
Finance), Frequently Asked Questions about IMF Involvement in the Eurozone Debt Crisis, August 27, 2010, published
by the Congressional Research Service, http://www.fas.org/sgp/crs/row/R41239.pdf
The IMF has changed over time as the world financial system has evolved. It now provides more technical
assistance to member countries on banking and finance issues. However, its principal function is still one of
lending money and encouraging reform to help countries deal with balanceofpayments and financial crises.
D. IMF stated purposes

Martin Weiss (Specialist in International Trade and Finance), International Monetary Fund: Background and Issues for
Congress,, published by the Congressional Research Service, June 12, 2012
http://www.fas.org/sgp/crs/misc/R42019.pdf
The IMF has six purposes that are outlined in Article I of the IMF Articles of Agreement: promoting
international monetary cooperation; expanding the balanced growth of international trade; facilitating exchange
rate stability; eliminating restrictions on the international flow of capital; ensuring confidence by making the
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general resources of the Fund temporarily available to members; and adjusting balanceofpayments imbalances
in an orderly manner.
Not much better off

Edwin M. Truman, (Ph.D in economics from Yale University. Senior fellow at the Peterson Institute for International
Economics since 2001, was assistant secretary of the Treasury for international affairs (19982000). He directed the
Division of International Finance of the Board of Governors of the Federal Reserve System (1977 98) & served as a
member of numerous international working groups on international economic & financial issues Institute for International
Economics, "Strengthening IMF Surveillance: A Comprehensive Proposal") December 2010;
http://www.iie.com/publications/pb/pb10-29.pdf
The International Monetary Fund (IMF) was established to address the shortcomings in economic policy
coordination during the interwar period, in particular following the onset of the Great Depression. However, the
operation of the Bretton Woods system was suboptimal, leading to its collapse in the early 1970s. Since then, the
operation of the system or nonsystem, according to ones perspective, has been little improved and some argue
has been worse.
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2. Definitions
A. Definition
Rebecca Nelson (Analyst in International Trade and Finance), Dick Kanto (Specialist in Industry and Trade),
Jonathan Sanford (Specialist in International Trade and Finance) Martin Weiss (Specialist in International Trade and
Finance), Frequently Asked Questions about IMF Involvement in the Eurozone Debt Crisis, August 27, 2010, published
by the Congressional Research Service, http://www.fas.org/sgp/crs/row/R41239.pdf
The International Monetary Fund (IMF) is an international financial institution that was created after World War
II to promote exchange rate and monetary stability. The founders aimed to avoid the beggarthyneighbor
exchange rate policies and banking instability that deepened the Depression during the 1930s and the lack of any
international mechanism for setting standards or coordinating policy.
B. History of IMF
The World Bank 2003. (The International Bank for Reconstruction and Development / The World Bank) A GUIDE TO
THE WORLD BANK, http://books.google.com/books?id=Pao6rPimHf4C&pg=PA29&lpg=PA29&dq=IMF+
%22specialized+agency%22+%22United+nations%22&source=bl&ots=e8Nw9wJ8Sd&sig=Tk5OPgDVc3QSyK0psCS3LdQA6Y&hl=en&sa=X&ei=rPsLULTwJIeu8QTP0aTTCg&ved=0CE0Q6AEwADgK#v=onepage&q=IMF
%20%22specialized%20agency%22%20%22United%20nations%22&f=false
The World Bank Group is an independent specialized agency of the United Nations, and it works in
particularly close cooperation with another independent specialized U.N. agency, the IMF . These relationships
are explained below (see also the history timeline in appendix B).
The Bretton Woods Institutions
The World Bank and the IMF were both established in 1944 at a conference of world leaders in Bretton
Woods, New Hampshire, with the aim of placing the international economy on a sound footing after World
War II. As a result of their shared origin, the two entities -- the IMF and the expanded World Bank Group -- are
sometimes referred to collectively as the Bretton Woods institutions.
C. IMFs definition of itself

IMF Official Website, undated. http://www.imf.org/external/about/overview.htm
The IMF has 188 member countries. It is a specialized agency of the United Nations but has its own charter,
governing structure, and finances. Its members are represented through a quota system broadly based on their
relative size in the global economy.
D. IMFs original reason to exist (stabilising currency exchange rates) disappeared in the 1970s
Patrick Welter (Economics editor of the German daily, the Frankfurter Allgemeine Zeitung. A graduate in economics; has
worked and conducted research at the Univ of Cologne, Germany, and George Mason Univ in Fairfax, Virginia) Less is more! Future
prospects for the International Monetary Fund, 2007. http://www.fnf.org.ph/downloadables/Less%20is%20More.pdf
The early 1970s witnessed the breakdown of the Bretton Woods system of fixed and theoretically adjustable
exchange rates. The US closed the gold window and the value of the American dollar was no longer linked to
gold. The transition to more or less flexible exchange rates brought to an end the IMFs primary task of bailing
out a country with balance of payments problems. When exchange rates are flexible, the problem of short-term
balance of payment problems does not arise if a country has a greater demand for imported goods (and
therefore foreign currency) than foreigners have for the countrys local goods and local currency, the domestic
currency depreciates, curbing domestic imports. In other words, the Fund was no longer needed.
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E. US pays the most towards the Fund

Out of the IMF's 187 member countries, U.S. taxpayers have the highest burden, providing over 17%, around
$55 billion, of the IMF's total funding.
F. Lending is only part of what the IMF does

IMF Website, Accessed August 20, 2012
http://www.imf.org/external/about/ourwork.htm
The IMF's fundamental mission is to help ensure stability in the international system. It does so in three ways:
keeping track of the global economy and the economies of member countries; lending to countries with balance of
payments difficulties; and giving practical help to members.
3. Functionality
a. IMF became an economic advisor by tying its lending to its advice
(Analysis: This means that the IMF offers loans but puts conditions on the lending, so a country that borrows has to agree to
certain changes in their government policies in order to get the loan)
Patrick Welter (Economics editor of the German daily, the Frankfurter Allgemeine Zeitung. A graduate in
economics; has worked and conducted research at the Univ of Cologne, Germany, and George Mason Univ in Fairfax,
Virginia) Less is more! Future prospects for the International Monetary Fund, 2007.
http://www.fnf.org.ph/downloadables/Less%20is%20More.pdf
But international organizations do not go down easily. On the lookout for a new task, the IMF increasingly
took on the role of advisor on macroeconomic adjustment for (mainly) developing countries. Advice was tied
to lending to make it easier for a country to implement the structural reforms and adjustments that it
proposed.
b. How IMF lending works

Patrick Welter (Economics editor of the German daily, the Frankfurter Allgemeine Zeitung. A graduate in
economics; has worked and conducted research at the Univ of Cologne, Germany, and George Mason Univ in Fairfax,
Virginia) Less is more! Future prospects for the International Monetary Fund, 2007.
http://www.fnf.org.ph/downloadables/Less%20is%20More.pdf
Imagine that you live beyond your means and are unable to pay your credit card bill. You raise a loan from a
bank, which gives you money, provided you promise to pay back according to the repayment schedule. The
IMF operates in a similar fashion. If governments and countries live beyond their means on borrowed money,
it is only a matter of time before their creditors lose confidence, withdraw their capital and trigger a financial
crisis. At this point, a government borrows money from the IMF. The Fund lends money on the condition that
the government pledges to undertake economic reform.
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4. Current Lending power

$340 billion available
Dan Arnall (former senior business news producer at ABC News He holds a master's from Columbia University Graduate
School of Journalism) "What is the International Monetary Fund?" May 2011
http://abcnews.go.com/Business/international-monetary-fund/story?id=13614241#.ULJvp4fAeSq
Founded after World War II to build a working international system for currency exchange and to avert
economic crises, the Washington, D.C.based IMF currently counts some 187 countries amongst its
membership. The Fund has deposits from member countries commonly called quotas totaling
some $340 billion, with additional commitments for about $600 billion from member governments
should the funds be needed.
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SIGNIFICANCE:
1. Failure to prevent/Bad advice/Economically worse off
A. The Fund rarely prevents downturn
Yilmaz Akyz (Ph.D. in Economics; Tun Ismail Ali Chair in Monetary and Financial Economics at the University of Malaya;
Former Director of the Division on Globalization and Development Strategies at the United Nations Conference on Trade and
Development), WHY THE IMF AND THE INTERNATIONAL MONETARY SYSTEM NEED MORE THAN COSMETIC REFORM,
November 2010, published by the South Centre, http://www.iadb.org/intal/intalcdi/PE/2012/11209.pdf
However, Fund lending has rarely prevented economic downturn in countries facing payments
instability and crises. Such lending is often associated with procyclical policy conditionality which serves to
deepen the impact of the financial crises on jobs and income. This is still the case with the IMF programs in
Europe despite the flexibility claimed.
Lending can create more problems

But more importantly, emergency lending could create more problems than it solves. When the scale is large, it
can endanger the financial integrity of the IMF. It is not always easy to determine if a crisis is one of liquidity
rather than insolvency.
Failed to prevent spread of crisis

Fred E. Foldvary (Ph.D., Economics, George Mason University, 1992; Lecturer in Economics, Santa Clara
University) Civil Society Institute & SCU Institute on Globalization Santa Clara University, "Abolish the IMF" May 7,
2003 http://www.scu.edu/civilsocietyinstitute/events/upload/AbolishIMF.pdf
The IMF is supposed to prevent contagion, the spread of financial injuries to other countries, like a
doctor seeking to prevent the spread of disease. But the IMF failed. In the past 15 years, there have been
over 90 serious banking crises, many of them followed by deep depressions. The Mexico bailout created
moral hazard that made the Asian crisis worse.
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Failed recommendations
To eliminate a budget deficit, the IMF typically tells the government to raise taxes and cut spending. Normally, balancing
the budget for consumption is good practice, but when the economy is injured, many people are unemployed and there is a
great need to restore enterprise and investment. IMF prescriptions to tighten monetary policy decrease bank
reserves and increase interest rates often to extreme levels often above 20 or even 50 percent. It becomes
very difficult for business to operate at such rates. When the IMF eliminates food and fuel subsidies for
the poor, people riot, as happened in Indonesia, Bolivia, Ecuador, and other countries.
Inappropriate solutions
Joseph Stiglitz, chief economist at the World Bank from 1997 to 2000, wrote a scathing analysis of the
IMF, Globalization and Its Discontents. According to Stiglitz, IMF decisions are often based on bad
economics and doctrines that, as he puts it, "seemed to be thinly veiling special interests. Stiglitz states,
When crises hit, the IMF prescribed outmoded, inappropriate, if standard solutions, without
considering the effects they would have on the people in the countries told to follow these policies.
Rarely did I see forecasts about what the policies would do to poverty. Rarely did I see thoughtful
discussions and analyses of the consequences of alternative policies...".
IMF failing in goals and actions
Bryan T. Johnson, non staff member heritage foundation, May 6, 1997, The International Monetary Fund: Outdated,
Ineffective, and Unnecessary, The Heritage Foundation is the nations most broadly supported public policy research
institute, with hundreds of thousands of individual, foundation and corporate donors. Heritage, founded in February 1973,
May 6, 1997 http://www.heritage.org/research/reports/1997/05/bg1113-the-international-monetary-fund
Many of the missions the IMF has chosen to undertake do not require any involvement by the Fund.
Congress should examine the IMF's overall effectiveness in accomplishing its stated purposes, as well as its impact on poor
and developing countries. If it does, it will find that the IMF more often than not has failed to advance the
purposes for which it was founded and has contributed little to improving the economies of less
developed countries.
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3. Counterproductive Economically
Greece Situation is because of IMF
C. J. Polychroniou, (PhD. a research associate and policy fellow at the Levy Economics Institute of
Bard College.) September 2012, Greeces Bailouts and the Economics of Social Disaster Levy
Economics Institute of Bard College, Policy Note, http://www.levyinstitute.org/pubs/pn_12_11.pdf
As the decline in Greek GDP should indicate, the economic situation in Greece today is catastrophic.
The economy is in freefall, and the social consequences are being widely felt. The main reason for this
awful situation is that the country has suffered for more than two years under a harsh austerity regime
imposed by the EU and the IMF. The bailouts have proven to be a curse. The nation is literally under
economic occupation and sinking deeper into the abyss, and there is very little reason to expect a
turnaround in the foreseeable future.
IMF loans deepened numerous crises & made them spread
Global Exchange (A Non-Profit NGO and Advocacy group dedicated to promoting social, economic, and environmental
justice around the world), Top Ten Reasons to Oppose the IMF, 2011,
http://www.globalexchange.org/resources/wbimf/oppose [Decratum]
During financial crisessuch as with Mexico in 1995 and South Korea, Indonesia, Thailand, Brazil,
and Russia in 1997the IMF stepped in as the lender of last resort. Yet the IMF bailouts in the Asian
financial crisis did not stop the financial panicrather, the crisis deepened and spread to more countries.
The policies imposed as conditions of these loans were bad medicine, causing layoffs in the short run and undermining
development in the long run.
More likely to default

Markus Jorra (Ph.D. in Economics. Economist, at the Deutsche Bundesbank, Economics Department,) published in
the Journal of International Money & Finance [Volume 31, Issue 4], "The Effect of IMF Lending on the Profitability of
Soverign Debt Crises" June 2012
http://www.sciencedirect.com/science/article/pii/S0261560612000186
Although the IMF features prominently both in the history of sovereign debt crises and in recent policy proposals aimed at
the prevention of such crises, surprisingly little is known on the effects of IMF program participation on the likelihood of
subsequent defaults. In light of the inconclusive findings in the theoretical literature this paper attempts to investigate this
issue empirically. Using univariate and bivariate probit specifications our results indicate that the adoption of an
IMF program increases sovereign risk over the medium term. More concretely, we estimate that the
probability of a sovereign default increases by approximately 1.5 to 2 percentage points in the aftermath
of IMF programs. These findings cannot be contributed to a lack of compliance with conditionality but seem to reflect the
effects of IMF interventions per se. Financial markets' cautious reaction to Greece's rescue package described in the
introduction of this paper thus seems legitimate in the light of these results.
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A. Make Financial crises worse

The IMF's counterproductive efforts have made financial crises much worse. Even former Russian Deputy Prime
Minister Boris Federov has stated, I strongly believe that IMF money injections in 19941998 were detrimental
to the Russian economy and interests of the Russian people. Instead of speeding up reforms, they slowed them.".
Uncertainty (caused by bailouts) causes underperformance in world economy

Cathy McMorris Rodgers (Executive MBA from the University of Washington; Republican U.S. Representative
for Washington's 5th Congressional District), Time to Cut IMFs Credit, End Europes Bailouts, June 9, 2012,
published by Breitbart, http://www.breitbart.com/Big-Peace/2012/06/09/Time-to-Cut-IMFs-Credit
Those who worry that revoking the $100 billion line of credit would scare the markets should remember two things. First,
its actually the uncertainty caused by the endless bailouts and the fear theyll never end because of the lack of
fiscal discipline which has caused the swings in the market and the underperformance of the world
economy since the Great Recession officially ended in 2009. The crushing burden of debt and the fear that
government debt is out of control is the main reason why this recovery has been so lackluster, in contrast to
the Reagan Recovery which was led by the private sector, not government stimulus, and was much
stronger.
The funds business model sabotages capitalism
Amar Bhide (Doctor of Business Administration from Harvard Business School; Professor of International
Business at Tufts University), Edmund Phelps (Ph.D. from Yale University; Winner of the 2006 Nobel
Memorial Prize in Economic Sciences; McVickar Professor of Political Economy at Columbia University; Director of
Columbia University's Center on Capitalism and Society), More Harm Than Good, July 11, 2011, published by The
Daily Beast, http://www.thedailybeast.com/newsweek/2011/07/10/amar-bhide-and-edmund-phelps-on-what-s-wrong-withthe-imf.html
The IMFs business model sabotages properly functioning capitalism, victimizing ordinary people while
benefiting the elites. Do we need international agencies to enable irresponsibleverging on immoralborrowing
and lending? Instead of dreaming up toocleverbyhalf schemes to stumble through crises after they happen,
why not just stop imprudent banks from accommodating foreign borrowing by feckless governments?.
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IMF creates the problems it sets out to fix

Benjamin M Friedman (Ph.D. in Economics from Harvard University; William Joseph Maier Professor of Political
Economy at Harvard University), Globalization: Stiglitzs Case, August 15, 2002, published by the New York Review of
Books, http://www.nybooks.com/articles/archives/2002/aug/15/globalization-stiglitzs-case/?%20pagination=false
As a further consequence of the misguided policies that follow from this curious blend of ideology and bad
economics, Stiglitz argues, the IMF itself is responsible for worseningin some cases, for actually creatingthe
problems it claims to be fighting.
IMFs debt policies increase poverty

http://www.globalexchange.org/resources/wbimf/oppose
IMF's and World Bank's structural adjustment policies (SAPs) ensure debt repayment by requiring countries to
cut spending on education and health; eliminate basic food and transportation subsidies; devalue national
currencies to make exports cheaper; privatize national assets; and freeze wages. Such belttightening measures
increase poverty, reduce countries ability to develop strong domestic economies and allow multinational
corporations to exploit workers and the environment.
Detrimental to weak countries

Further analyses additionally show that IMF programs are especially detrimental to fiscal solvency
when Fund resources are targeted to countries with already weak fundamentals. Overall, our evidence is
therefore consistent with the idea that debtor moral hazard is most likely to occur in these situations as
predicted by the theoretical work on the catalytic finance hypothesis. Other explanations that point to the effects of debt
dilution and the possibility of IMF triggered debt runs, however, are also possible. The separation of the effects in terms of
these different explanations surely constitutes an interesting area for future research.
IMF leaves countries with crippling debt which causes a fragile economy
Rajesh Makwana (Director/founder of Share The World's Resources an NGO campaigning for global economic & social
justice. STWR holds a consultative status at the Economic & Social Council of the United Nations) " Decommissioning The
IMF, World Bank and WTO" December 2005
http://www.stwr.org/imf-world-bank-trade/decommissioning-the-imf-world-bank-and-wto.html
Together these institutions [the IMF, World Bank, and WTO] encourage economic structural
adjustment, privatization and market liberalization in emerging markets. Within the competitive global
framework, developing countries are left with little choice other than to comply with the neoliberal
agenda. As a result these countries are often left with crippling debt and a fragile economy. Meanwhile,
foreign investors and multinational corporations gain control of a significant portion of the worlds resources, finance,
services, technology and knowledge.
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Ideology increases poverty

The underlying theory that these International Financial Institutions (IFIs) propagate is that of economic growth
and freemarkets as the only means of generating wealth for development and poverty reduction. This neoliberal
ideology now dominates the global economy and has proven to be extremely profitable for corporations
and financiers. Meanwhile, these policies have increased levels of poverty and inequality in developing
countries.
IMF/World Bank devastated many economies
With restrictions on the movement of capital relaxed, a period of destabilizing financial speculation and
capital flight often results, further benefiting wealthy foreign investors and speculators whilst often
bankrupting domestic companies. This same IMF/World Bank enforced agenda has devastated many
developing economies in East Asia and Latin America over the past 20 years.
IMF adds crippling debt
When a developing country requires urgent financial assistance to avoid economic catastrophe, it
usually turns to the IMF. Although this assistance constitutes a crippling debt for the borrower, the IMF
also insists on economic reform as a condition to the loan. In effect the IMF take this opportunity to
render the struggling economy free-market friendly. Prioritizing debt repayment, market liberalization
and privatization allow corporations and private interests to capitalize on these reforms. The economic
consequences for the developing country are often dire.
IMF impedes poverty reduction and economic development
However, as described in the above analysis, the past 20 years have provided ample evidence that the
IMF, World Bank and WTO impede poverty reduction and economic development in poor countries. It
is clear that the global economy needs to be urgently overhauled if poverty and inequality are ever to be
resolved.
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2. Encourages Recklessness Behavior (Moral Hazard)

Politicians evading responsibility
Daniel Ben Ami (Journalist and author specializing in economics and finance ; His work has appeared in general and
specialist publications including the Financial Times, The Guardian, The Independent, Prospect, The Sunday Telegraph and The Sunday
Times), Five Reasons Why the IMF Should be Scrapped, May 25, 2011, published by Fundweb, http://www.fundweb.co.uk/fivereasons-why-the-imf-should-be-scrapped/1031634.article
One reason politicians often opt for IMF bailouts in times of trouble is that it provides them with a way
of evading responsibility for their actions. They can claim that they are being forced to impose austerity by an
external institution rather as a result of their own policies. The abolition
of the IMF would make their culpability
more transparent.
Moral Hazard Explained
The very presence of the IMF creates the perverse incentive called moral hazard. Moral hazard occurs in
insurance when the presence of insurance makes it more likely that the insured party indulge in the behavior insured against.
People will engage in riskier behavior if they dont bear the full consequence. The availability of the
IMF as the bailer outer of last resort provides less incentive for dysfunctional governments to avoid
excessive deficits and less incentive for private lenders to be prudent.
Easy to risk money when its not yours
Julie Borowski (Graduated Magna Cum Laude from Frostburg State University with a degree in Political Science,
Economics, and International Studies; Policy Analyst for FreedomWorks), TOP 10 REASONS TO STOP THE
INTERNATIONAL MONETARY FUND BAILOUTS, January 26, 2011, published by FreedomWorks,
http://www.freedomworks.org/files/1-26-11_IMF_Top_10_New.pdf
Governments and banks are more likely to take greater risks when they believe that they will not be exposed to
the full costs of their mistakes. The IMF rewards countries with poor macroeconomic policies and banks that
make risky loans with taxpayersubsidized bailouts.
Leaders held accountable

The main reason the IMF should be abolished is that without it, countries with bad policies would have
to face the consequences: bankruptcy, policy change, possibly regime change or deep structural changes.
The IMF enables government chiefs to continue their bad policies and stay in power. If the IMF did not
exist, some countries that borrow from it would default, but that would send a signal to lenders to avoid loans that are too
risky, and that would induce governments to make more fundamental reforms or be replaced.
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Helps undermine commitment to fix the problem

Doug Bandow ( J.D., Stanford University, BA Ecomomics, senior fellow at the Cato Institute, specializing in
foreign policy and civil liberties; worked as special assistant to President Reagan ) Shut Down the Wasteful IMF
June 27, 2011 http://www.cato.org/publications/commentary/shut-down-wasteful-imf
The Fund's financial assistance alone is unlikely to persuade governments otherwise lacking the will to reform.
Loans can, however, undermine that commitment by reducing the financial pain caused by politically popular but
economically harmful policies.
Reduces incentive to fix economy

Indeed, argued economist Roland Vaubel, the prospect of cheap IMF lending is likely to generate a moral
hazard by reducing the incentive to stay solvent. It would pay a potential borrower to pass the international
means test. While governments rarely desire to wreck their economies, they do choose to take greater risks.
Causes Debt Cycle

Since the IMF crisis lending is effectively designed to keep countries current on debt payments to international
creditors and to maintain an open capital account, it often leads to an unequal burdensharing between creditors
and debtors. Commercial debt gets replaced by debt to the IMF which is often more difficult to renegotiate.
Private debt gets dumped on the public sector sovereign debt invariably rises after financial crises resulting from
excessive buildup of debt by the private sector. All these create moral hazard and prevent the operation of market
discipline, because they allow investors and creditors to escape without bearing the full consequences of the risks
they have assumed.
Bad decisions are left unpunished

Finally, crisis lending by the IMF often leads to an unequal burdensharing between creditors and debtors. When
funds are used to pay off debt to private creditors, sovereign commercial debt gets replaced by debt to the IMF
which is often more difficult to renegotiate. Moreover, private debt gets dumped on the public sector sovereign
debt invariably rises after financial crises resulting from excessive buildup of debt by the private sector. All these
create moral hazard and prevent operation of market discipline, because they allow investors and creditors to
escape without bearing the full consequences of the risks they have undertaken.
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Fund encourages recklessness

The IMF recently announced plans to send $130 billion to spendthrift Ireland. It is reported that Portugal and
Spain may be next in line to seek funding, followed by Italy and Belgium. The IMF has institutionalized what
economists call moral hazard. It has encouraged reckless behavior by holding out the prospect of a bailout to any
nation or large, politically connected bank that fails.
Offers bailouts to stay in business

The IMF has encouraged reckless behavior by holding out the prospect of a bailout to any country and big
politically connected bank that fails. In order to survive, the IMF must provide credit. This has inflamed what
economists call moral hazard.
Hey, Free money!

The IMF has spent decades propping up some of the most repressive regimes in the world. Little evidence has
shown that IMF loans have helped average citizens in authoritarian nations. IMF loans are a government to
government transfer. Zambian economist Dr. Moyo says a constant stream of free money is a perfect way to
keep an inefficient or simply bad government in power..
Just talking about the possibility of IMF bailouts hurts reform efforts
Terry Miller 2009. (former ambassador to the United Nations Economic and Social Council; former
Deputy Assistant Secretary of State for Economic and Global Issues) A Trillion Dollars of Smoke and Mirrors April
3, 2009 http://blog.heritage.org/2009/04/03/a-trillion-dollars-of-smoke-and-mirrors/
European nations have offered to channel about $200 billion of their own funds to themselves through the IMF (a kind
of gentlemans money-laundering to avoid restrictions in their own treaties). Lagarde wants others to add $300 billion to
that kitty. The U.S. Treasury has said no, and rightly so. Replacing current euro-debt with IMF loans, no matter
how rigorously structured, will only prolong the agony. The failing euro-zone economies need to get
their fiscal and economic houses in order. That means reining in government spending now, not more
debt, and aggressively pursuing economic policies such as labor market reforms that can ignite
growth rather than paying lip service to growth as a throwaway line at the end of a speech. Even talking about the
possibility of big IMF bailouts may be having a negative impact, because it suggests more time and
more debt before real action is taken.
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Bailouts fundamentally unjust

Ian Vsquez (director of the Cato Institutes Project on Global Economic Liberty) Why We Should Say No to the IMF
1998 http://www.cato.org/pubs/policy_report/v20n3/imf.pdf
The second reason I oppose IMF bailouts is that they are expensive, bureaucratic, and fundamentally unjust
solutions to currency and debt crises. Just as profits should not be socialized when times are good, losses should
not be socialized during difficult times. It is not just that citizens bear the debt burden that is attached to IMF
loans. IMF bailout money goes to governments that have created the problems to begin with and have proven
unwilling or reluctant to introduce necessary reforms. Giving money to such governments helps to sustain bad
policies and delays necessary reforms.
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4. Fosters Dependency
Fosters a culture of dependency
Rather than encouraging progrowth policies, IMF loans foster a culture of dependency among
developing nations. Its created a horde of loan addicts. More than 70 countries have relied on IMF loans
for more than 20 years.
The fund has created a horde of loan addicts
Rather than encouraging progrowth policies, IMF loans foster a culture of dependency among
developing nations. It has created a horde of loan addicts. More than 70 countries have relied on IMF
loans for more than 20 years, and most of these countries are left with massive debts that they cannot afford to pay,
which only escalates poverty and instability. These IMF loans have distorted incentives to advance policies that spur
economic growth.
IMF loans usually become permanent

The Fund has failed to help countries become selfsufficient. In virtually every case, these IMF loans become
permanent. University of Virginia economics Professor Leland Yeager observes that selfimportant international
bureaucracies have institutional incentives to invent new functions for themselves, to expand, and to keep client
countries dependent on their aid..
IMF creates long term dependency

May 6, 1997http://www.heritage.org/research/reports/1997/05/bg1113-the-international-monetary-fund
IMF lending is more likely to create long-term dependency than to act as short-term assistance. IMF
lending, as defined by its articles, is supposed to be short term. But according to economist Doug
Bandow, most countries actually become long-term users of IMF loans. A review of IMF lending
activities reveals an increasing reliance on the Fund by less developed countries.
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5. Taxpayers stuck paying

Taxpayers on the hook
In recent years the IMF has shown itself to be a prime example of our bailout culture. The fund has regularly put
American taxpayers on the hook to bail out powerful banks and profligate nations with poor economic policies.
US is the largest contributer

Nearly onethird of the bailout money comes from the IMF, and the largest contributor to the IMF is
the U.S. The Obama Administration has quietly endorsed these bailouts because they believe that, while
the bailouts are costly, by enforcing austerity on Europe, they will also solve the problem.
US taxpayers subsidize 55 billions annually
Dominique StraussKahn and other privileged IMF bureaucrats have lived large on the U.S. taxpayers dime.
U.S. taxpayers subsidize the IMF to the tune of 55 billions of dollars annually. We have the largest stake in the
IMF contributing roughly 17.09 percent of its total funding.
Forced to pay for Greece bailouts

Most recently the IMF sent $145 billion to the widely profligate Greece. The nation had long been living far
beyond its means. According to the Organisation for Economic Cooperation and Development, total government
expenditures in Greece were 44.8% of GDP in 2008. Greece's failure to cut its bloated public sector and lavish
welfare programs left it bankrupt. We were forced to pay for its mistakes.
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We have little authority on the IMF

Despite our payments to the IMF, our elected representatives in Congress have no authority to directly control
the actions of the international organization. Unelected bureaucrats at the IMF have the ultimate power to dictate
fiscal and monetary policy on a global scale.
At the expense of taxpayers

As the Hoover Institution at Stanford University notes, it would be difficult to devise a more regressive wealth
transfer scheme than IMF financing programs. IMF loans are used to rescue wealthy, politically connected
bankers, investors, and financiers at the expense of domestic taxpayers.".
American taxpayers forced to pay

The International Monetary Fund (IMF) has regularly put American taxpayers on the hook to bail out powerful
banks and profligate foreign nations with poor economic policies. According to the Hoover Institution, it would
be difficult to devise a more regressive wealth transfer scheme than IMF financing programs. IMF loans are used
to rescue wealthy, politically connected bankers, investors, and financiers at the expense of domestic taxpayers..
US is the largest single contributor

If the IMF was only spending other people's money, then the U.S. might remain an amused bystander. But as the
largest single contributor (16.67 percent, to be exact) to the Fund, American taxpayers are on the hook for a share
of that organization's lending, which ran more than $90 billion last year.
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6. Funding Elitists
IMF has fueled dictators
Even worse, the IMF has a long history of fueling ThirdWorld dictators. IMF loans and bailouts are government
to government transfers. A Joint Economic Committee study says that, evidence suggests that the IMF
knowingly makes loans to corrupt governments while recognizing that some of its loan conditions and procedures
can create circumstances promoting additional corruption. The IMF has given taxpayer funds to the Mubarak
regime in Egypt and the Gadhafi regime in Libya. Its clear that these IMF loans have hurt the average citizen in
these authoritarian nations.
IMF acts in interests of the elite

Benjamin M Friedman (Ph.D. in Economics from Harvard University; William Joseph Maier Professor of Political
Economy at Harvard University), Globalization: Stiglitzs Case, August 15, 2002, published by the New York Review of
Books, http://www.nybooks.com/articles/archives/2002/aug/15/globalization-stiglitzs-case/?%20pagination=false
Second, and more darkly, the IMF, in Stiglitzs view, systematically acts in the interest of creditors, and of rich
elites more generally, in preference to that of workers, peasants, and other poor people. He sees it as no accident
that the IMF regularly provides money that goes to pay off loans made by banks and bondholders who are eager
to accept the high interest rates that go along with assuming riskwhile preaching the virtues of free markets as
they do soalthough they are equally eager to be rescued by governments and the IMF when risk turns into
reality.
IMF acts in interests of the elite

Joseph Stiglitz (is an American economist & a professor at Columbia University. He is a recipient of the Nobel Memorial
Prize in Economic Sciences) August 2002
http://www.nybooks.com/articles/archives/2002/aug/15/globalization-stiglitzs-case/?pagination=false
Stabilization is on the agenda; job creation is off. Taxation, and its adverse effects, are on the agenda; land
reform is off. There is money to bail out banks but not to pay for improved education and health services, let
alone to bail out workers who are thrown out of their jobs as a result of the IMFs macroeconomic
mismanagement.
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7. Bailout Mentality
Wrong Focus
Daniel Ben Ami (Journalist and author specializing in economics and finance; His work has appeared in
general and specialist publications including the Financial Times, The Guardian, The Independent, Prospect, The Sunday
Telegraph and The Sunday Times), Five Reasons Why the IMF Should be Scrapped, May 25, 2011, published by
Fundweb, http://www.fundweb.co.uk/five-reasons-why-the-imf-should-be-scrapped/1031634.article [Decratum]
The overwhelming emphasis of IMF bailout programs is on rescuing troubled institutions rather than
helping national economies return to growth. In that sense it can be seen as a kind of institutional
welfare program. This is in contrast to the way the western media often presents bailouts as almost altruistic operations
for the benefit of poorer countries.
Mafia Card!
Amar Bhide (Doctor of Business Administration from Harvard Business School; Professor of International Business
at Tufts University), Edmund Phelps (Ph.D. from Yale University; Winner of the 2006 Nobel Memorial Prize
in Economic Sciences; McVickar Professor of Political Economy at Columbia University; Director of Columbia
University's Center on Capitalism and Society), More Harm Than Good, July 11, 2011, published by The Daily Beast,
http://www.thedailybeast.com/newsweek/2011/07/10/amar-bhide-and-edmund-phelps-on-what-s-wrong-with-the-imf.html
The Greek debacle and the North African drama raise existential questions about the IMF. Responsible
governments have no business borrowing vast sums from abroad, rather than from domestic sources.
Thats what tinpot regimes do. And lending even more to borrowers who cant pay what they already
owe? Thats what loan sharks and mafiosi do.
A form of corporate welfare
It is impossible to create wealth through government to government transfers. The IMF merely diverts
money away from taxpayers in the productive private sector and into the hands of international
bureaucrats. These IMF officials redistribute wealth to benefit multinational corporations and banks. Its
a form of corporate welfare.
Doomed bailouts: IMF borrowing to bailout the Greek welfare state cannot end well
It is an extraordinary spectacle. The U.S. and other improvident, irresponsible debt-laden countries provide money
that they do not have to an international organization that produces nothing to lend to even more improvident,
irresponsible debt-laden countries. The U.S. borrows money from China to lend to Greece to pay off
German banks which financed the generous Greek welfare state. The outcome of this process cannot be
good. Mr. Strauss-Kahn's travails have provided at least one important public service: focusing attention on the IMF .
With America drowning in red ink, Washington must stop throwing good money after bad. The Fund
would be a good place to start.
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IMF acts as a loan shark, has enormous leverage

http://www.globalexchange.org/resources/wbimf/oppose
Since the debt crisis of the 1980's, the IMF has assumed the role of bailing out countries during
financial crises (caused in large part by currency speculation in the global casino economy) with
emergency loan packages tied to certain conditions, often referred to as structural adjustment policies
(SAPs). The IMF now acts like a global loan shark, exerting enormous leverage over the economies of
more than 60 countries. These countries have to follow the IMF's policies to get loans, international
assistance, and even debt relief. Thus, the IMF decides how much debtor countries can spend on
education, health care, and environmental protection.
Impact: Bailouts and reckless banking perpetuate financial crisis
Prof. Willem Buiter. (Professor of European Political Economy, London School of Economics and Political
Science; former chief economist of the EBRD, former external member of the MPC; adviser to international
organisations, governments, central banks and private financial institution) March 6, 2009, The Feds moral hazard
maximizing strategy, FINANCIAL TIMES (London newspaper) http://blogs.ft.com/maverecon/2009/03/the-feds-moralhazard-maximising-strategy/
I am deeply worried that other people may, as a result of this, be willing to do business with other U.S.
financial institutions on the same ludicrous terms that brought us the current crisis. And why wouldnt they be
happy and relaxed about once again taking wild and crazy bets? They now know that, should their bets fail, in
a crisis like this, there is some sucker-institution in Washington DC that will make sure that they dont have to
take some losses. Unless the counterparties pay the full price for their hubris and recklessness, they will be
back for more.
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8. Lack of Enforcement
Allan H. Meltzer (Ph.D in economics from UCLA. He has been a member of the President's Economic Policy Advisory
Board, an acting member of the President's Council of Economic Advisers, & a consultant to the U.S. Treasury Department
& the Board of Governors of the Federal Reserve System. In 1999 & 2000, he served as the chairman of the International
Financial Institution Advisory Commission, which was appointed by Congress to review the role of the International
Monetary Fund, the World Bank, & other institutions) The Review of International Organizations (Volume 6, Issue 3-4) "The
IMF returns" September 2011
Unfortunately, one critical part of IMF policy operations has not changed. The IMF has always
combined large loans with poorly enforced promises to reform (Vreeland 2006). That hasnt changed. Despite
internal research showing that most promises are kept for a year or less (IMF 2003), the IMF has not found an ability to
sanction countries that violate agreements. At times, the IMF has withdrawn funding for a short period, but governments
know from experience that the withdrawal is temporary.
IMF ineffective at enforcement

The IMF fails to enforce the requirements it imposes. Even when the IMF is specific and actually
manages to recommend economic policies that might encourage long-term growth, it is ineffective in
holding countries accountable for violating these agreements. The IMF repeatedly has entered into agreements
with countries that have a history of violating their contracts. Even when the Fund has established that a country violated
reforms outlined in the loan agreement, it often will negotiate with that same country for a new or altered contract, and the
loans continue.
Example Ineffective at enforcement

Bryan T. Johnson, non-staff member heritage foundation, May 6, 1997, The International Monetary Fund: Outdated,
For example, Peru entered into 17 different arrangements with the IMF between 1971 and 1977, and
continues to receive money from the IMF today. During the same period, Peru failed to meet the
conditions for most of these agreements. Instead, the government continued its self-destructive
economic policies. For example, in 1971, Peru's external debt was $2.7 billion; by 1977, Peru had signed
17 agreements with the IMF, yet its external debt had soared to over $9 billion. Even though Peru failed
to meet the conditions for these agreements, it continued to receive IMF funding.
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10. Unaccountable/ not transparent

IMF is undemocratic and unaccountable
Both the World Bank and IMF criticize recipient governments for their lack of transparency,
widespread corruption and undemocratic regimes, insisting on the reform of these aspects as a precondition to granting loans and debt relief. However these same issues haunt the World Bank and IMF
which are widely regarded as not transparent, undemocratic and unaccountable. Corruption within these
organizations is rife, and millions of dollars unaccounted for.
IMF unaccountable
Without democratic representation within these bodies, and cooperation with the south, The WTO,
IMF and World Bank will remain unaccountable to the very people they claim to be assisting. In light of
the failures of the WTO, World Bank and IMF to address poverty and inequality, global protests
continue to gain momentum, citizens and nations are calling for a ground up process of globalisation
that is not controlled by, and for the benefit of, the ruling elites.
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SOLVENCY:
1 . Advocacy
Bailout strategy has failed
Instead of waiting on the inevitable, the European Union, the International Monetary Fund, and the
Obama Administration which provided a $100 billion line of credit to the IMF, which is being used for the bailouts
should rethink their Bailout Universe strategy. That strategy has failed, and a new one is needed.
Borrowing shouldnt be used for bailouts
International Monetary Fund, the World Bank, & other institutions) The Review of International Organizations (Volume 6,
Issue 3-4) "The IMF returns" September 2011
The IMFs role in world financial markets increased following the credit and housing market crises. One
good change was the acceptance of a proposal made by the Meltzer Commission to adopt a flexible credit line that grants
responsible borrowers a line of credit to use in emergencies. Some mistaken changes gave the IMF a large increase in lending
resources, relaxed the requirements for reform imposed on borrowers, and increased loans to risky borrowers such as
Ukraine. Borrowing should be used to prevent the spread of financial crises, not to bailout imprudent
borrowers that mismanage their economy.

IMF cant solve global financial crises - and their efforts to help actually increase crisis risks
Brett Schaefer and Anthony Kim (Schaaefer - Jay Kingham Fellow in International Regulatory Affairs at
Heritage's Margaret Thatcher Center for Freedom; master's degree in international development from the School of
International Service at American University. Kim - Policy Analyst in Heritage's Center for International Trade and
Economics; master's degree in international trade and investment policy from the Elliott School of International Affairs
at the George Washington University) The World Needs Less IMF, Not More October 23, 2007
http://www.heritage.org/research/reports/2007/10/the-world-needs-less-imf-not-more
The days when an institution like the IMF can arrest serious global financial crises are waning or
ended. It simply doesn't have enough money. Today's global markets facilitate the flow of trillions of dollars in private capital. In
2006, international net capital flows totaled more than $4 trillion, of which $650 billion went to developing countries. Global trade of
goods and commercial services exceeded $14 trillion in 2006. The usable resources of the IMF, at less than $300 billion, are minimal in
relation to international financial flows-certainly insufficient to counter private capital flows. Solving serious financial crises
through IMF bailouts is simply no longer possible. Worse, attempts or implicit promises to perform such a role
arguably increase market volatility and the likelihood of crisis by creating a moral hazard that encourages imprudent risktaking by governments and investors.
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Obsolete orginization
I conclude that the IMF is obsolete, the IMF makes matters worse rather than better, and it will
continue to do so, and therefore the world would be better off without the IMF.
IMF lends money in order to justify its own existence - it is not effective at promoting reform
Even when the organization pushes for sensible reform, it has rarely proved to be a tough taskmaster. Only a
minority of borrowers reduced their need for aid; many nations were addicted to Fund programs for decades.
New programs routinely followed old, failed ones. For example, Peru negotiated seventeen different programs
between 1971 and 1977. Economist John Williamson pointed to the problem of the Fund feeling pressure "to
lend money in order to justify having it."
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IMF no longer needed

The IMF no longer is needed (if it ever was) to establish this kind of multilateral system. A system of
multilateral currency exchange has existed in one form or another since the onset of international trade;
it has existed formally since the end of World War II. There is no evidence that the IMF has had any
impact in forcing less developed countries to comply with the established multilateral system of
exchange. In fact, the most compelling reason for these countries to abide by the conditions of the
current multilateral system is
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2. Alternatives to bailouts
Tough Love is needed for Europe
Jeremy Warner (assistant editor of The Daily Telegraph, is one of Britain's leading business & economics
commentators) "The IMF is no longer serving its purpose" January 2012
http://www.telegraph.co.uk/finance/currency/9025245/The-IMF-is-no-longer-serving-its-purpose.html
Tempting though it is to see the IMFs commitment to the euro as evidence of a FrancoGerman takeover, its actually less
sinister than that. It is to do with fear of the catastrophic consequences of a disorderly breakup. These fears also instruct the
Coalitions policy on further bailouts. Yet until there is recognition that the euro under the present framework, not the fiscal
profligacy of member states, is in fact the major part of the problem, longterm solutions will remain elusive . Tough love,
not more bailouts, is the appropriate IMF policy for Europe forcing political leaders to confront
reality and the single currencys northern states to take their losses.
Argentina Example: Defaults work
International Monetary Fund, the World Bank, & other institutions) The Review of International Organizations [Volume 6,
Issue 3-4] "The IMF returns" September 2011
Argentina made the largest debt default that had ever occurred. Holders of Argentina bonds included many
individuals in Europe and Japan as well as financial institutions, especially emerging market funds. The large number
and widely dispersed creditors made settlement difficult. The IMF had no role. The market arranged a
settlement acceptable to 75% of the creditors that was mainly the work of Adam Lerrick who organized the
individual creditors and negotiated with the Argentine government (Cooper and Momani 2005). This experience
suggests that, without official interference, market solutions can work.
Better Alternatives
Now the IMF has become the bailout king. There always were better alternatives to throwing cash at countries
suffering economic and financial crashes: bankruptcies, debt reschedulings, and forced workouts. The common
panic fomented by the Fund was rarely justified.
IMF duplicates other organizations

Even those who agree that the IMF is outdated and recognize its ineffectiveness may claim that there
remains a need for an organization like the IMF. This is not the case. The Fund duplicates the duties and
functions of other major international organizations, in addition to engaging in activities that are
unnecessary
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Examples of Failures
1. Greece
IMF was wrong
International Monetary Fund, the World Bank, & other institutions) The Review of International Organizations (Volume 6,
Issue 3-4) "The IMF returns" September 2011
Why is the IMF part of the Greek loan? Greece is part of a monetary union, just as California is part of the dollar system.
Should the IMF lend to California? Greece is, and California is not, an IMF member. But the main reason for IMF
involvement is that it shifts some of the costs to the United States, Canada, the U.K., China, Japan and other IMF members.
dwell on the Greek crisis because it shows much of what is wrong with the IMF. It avoided privatizing
and selling assets, and it provided no means of assuring that the Greek government would fulfill its
budget promises.
Lending money not the answer
International Monetary Fund, the World Bank, & other institutions) The Wall street Journal "Leave the Euro to the PIGS"
September 14, 2011

http://online.wsj.com/article/SB10001424053111904353504576566960800871004.html
Lending more money to Greece will not end Greece's problem. Greece cannot meet the budget targets
set by its agreements with the European Union and the International Monetary Fund (IMF). A core
problem is the wide gap between average worker's productivity and the average real wage. The
difference is about 15% to 20%; that's the amount by which productivity must increase or real wages
must fall to achieve equilibrium.
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Knew unlikely that Greece would succeed

Costas Panayotakis (Associate Professor of Sociology at the New York City College of Technology. PhD Sociology;
B.A ecconomics) "On Assigning Blame for the Greek Tragedy" July 26, 2012
http://www.nytexaminer.com/2012/07/on-assigning-blame-for-the-greek-tragedy
The article also quotes Panagiotis Roumeliotis, a Greek banker and Greeces former representative to the
IMF who admits that the IMF went along with the Greek austerity program even though [w]e knew at
the fund from the very beginning that this program was impossible to be implemented because we didnt
have any any successful example. According to Roumeliotis, no such example was available because, being a
member of the eurozone, Greece could not do what countries in IMF programs usually do, namely restoring competitiveness
through a currency devaluation.
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2. Other
IMF causes financial crisis
The IMF, working in conjunction with Wall Street bankers and the US Treasury, has effectively forced
many emerging economies to liberalise their financial markets. This happened to many countries in East Asia
and Latin America in the 1980s and 90s. Often this exposed them to massive financial speculation which inturn devalued their currencies, and created recession and financial crisis. Bolivias per capita income is
less than it was 25 years ago, with 63% of Bolivians living in poverty. Argentina is another well
documented recent example, as is Thailand, South Korea, Indonesia, the Philippians, Russia and
Poland.
Zimbabwe: Implications of loan = human rights abuse, and financial devastation
Flora Manship, (Executive Managing Editor, Emory International Law Review; Winner of
the W. Richard Smith Founder's Award for Best Comment; J.D. Candidate, Emory
University School of Law (2011); B.A., magna cum laude, Drew University (2008).)
Comment: Collateral Damage of the IMFs Global Economic Relief: A Case Study of
Zimbabwe Emory International Law Review, 2010, 24 Emory Int'l L. Rev. 821[Accessed
via Lexis Nexis] [KW]
Both Mugabe's human rights abuses and his highly corrupt government have dire implications for the
effects of the loan in Zimbabwe. Funding a leader who has denied fundamental human rights to
Zimbabwe's citizens, without a mandate for improvement, sends the message that the Fund is indifferent
to human rights concerns. Ultimately, Mugabe's rule will be strengthened with more money, so further
oppression of the Zimbabwean people is inevitable. Additionally, because Zimbabwe does not have the
finances needed to service repayment of the loan, the resulting financial harm will outweigh any
financial benefit, leaving Zimbabwe economically worse off.
Example: Russia/Argentina
Argentina and Russia ended up in default while receiving IMF support on grounds that they were
facing liquidity crises, and there is no guarantee that Greece will now be able to avoid default. Since the
IMF does not enjoy de jure preferred creditor status, when the scale of operations is large, it can get
badly hurt in the event of a messy default and asset grab race by creditors.
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Example: Argentina
Take Argentina. For many years the IMF poured into the country taxpayersubsidized loans with an
exceptionally low interest rate of 2.6%. After receiving IMF bailout packages of more than $40 billion,
the Argentine economy collapsed. The Joint Economic Committee found that the IMF led to moral hazard problems
and sustained and subsidized a bankrupt Argentine economic policy, whose collapse is now all the more serious.".
G. IMF loans deepened numerous crises & made them spread

During financial crisessuch as with Mexico in 1995 and South Korea, Indonesia, Thailand, Brazil,
and Russia in 1997the IMF stepped in as the lender of last resort. Yet the IMF bailouts in the Asian
financial crisis did not stop the financial panicrather, the crisis deepened and spread to more countries.
The policies imposed as conditions of these loans were bad medicine, causing layoffs in the short run and undermining
development in the long run.
H. Loans to South Korea caused recession

During financial crises -- such as with Mexico in 1995 and South Korea, Indonesia, Thailand, Brazil, and Russia in 1997 -- the IMF
stepped in as the lender of last resort. Yet the IMF bailouts in the Asian financial crisis did not stop the financial panic -- rather, the crisis
deepened and spread to more countries. The policies imposed as conditions of these loans were bad medicine, causing layoffs in the short
run and undermining development in the long run. In South Korea, the IMF sparked a recession by raising interest rates,
which led to more bankruptcies and unemployment. Under the IMF imposed economic reforms after the peso bailout in 1995,
the number of Mexicans living in extreme poverty increased more than 50 percent and the national average minimum wage fell 20
percent.
Niger's debt has grown under IMF

Nick Dearden (Campaigner on global justice issues; Director of the Jubilee Debt Campaign, an initiative created to
challenge the enormous and unjust debts which rich countries and their banks created in the developing world), Greece can
do without the 'sympathy' the IMF has shown Niger, May 29, 2012, published by the Guardian,
http://www.guardian.co.uk/commentisfree/2012/may/29/greece-sympathy-imf-niger [Decratum]
Nor did a programme of austerity and liberalisation reduce debt levels any more than it is doing in Greece. Niger's
debts continued to rise from $960m when structural adjustment started, to $1.8bn in 1990, and then, after
falling off a little, an alltime high of $2.1bn in 2003. More debt meant more control by the IMF, which
meant more austerity and more reforms.
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2. IMF failure examples

Of the 89 less developed countries that received IMF loans between 1965 and 1995, 48 are no better off
economically today than they were before receiving IMF loans; Of these 48 countries, 32 are poorer
than they were before receiving IMF loans; and of these 32 countries, 14 have economies that are at
least 15 percent smaller than when they received their first IMF loans.
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A2: Loans foster Growth

No evidence that it promotes growth
The IMF famously imposes policy changes as part of its lending programs. Unfortunately, there is no evidence
that the organization has effectively promoted economic growth. Even its advocates can point to few successes.
No evidence of positive effects

Donald Boudreaux (Ph.D., in economics, is from Auburn University & his law degree is from the University of
Virginia School of Law. Professor of economics at George Mason University) "Abolish the IMF" May 19, 2011
http://cafehayek.com/2011/05/abolish-the-imf.html
Undeterred by the total disappearance of its purpose, the IMF flush with continuing streams of subsidies,
especially from American taxpayers morphed into a development agency. The quotation marks around
development are no mistake. Theres no evidence that the IMFs efforts as a development agency have had any
positive effects, unless by positive effects you include creating among many poor countries a culture of
dependency upon foreign aid, along with propping up authoritarian regimes.
Doesnt focus long term

Daniel Ben Ami (Journalist and author specializing in economics and finance; His work has appeared in
general and specialist publications including the Financial Times, The Guardian, The Independent, Prospect, The Sunday
Telegraph and The Sunday Times), Five Reasons Why the IMF Should be Scrapped, May 25, 2011, published by
Fundweb, http://www.fundweb.co.uk/five-reasons-why-the-imf-should-be-scrapped/1031634.article
The overwhelming emphasis of the IMF is on promoting shortterm stability rather than longterm growth. In
late 2008, for example, it was part of the drive to restore stability to the global financial system. However, this
was done by evading the fundamental weakness of the global economy.
Have failed to produce growth

The IMF hands out lucrative contracts to politically connected corporations for construction projects funded by
taxpayers. Just as weve seen in America, these taxfunded stimulus programs have failed to produce economic
growth.
IMF has spotty success

The IMF's record of success is spotty at best. There is scant evidence, for example, that it contributed to
the stabilization of exchange rates after its creation.
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IMF fail at economic growth

The facts show that the IMF has failed to fulfill many of the goals for which it was created. In
particular, it has failed at its newest mission: promoting economic development. There is no justification
for continuing to support any organization that lacks a viable purpose, especially when that organization
costs the U.S. taxpayer as much as the IMF does.
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A2: IMF promotes Democracy

loans motivate governments to reduce democracy and civil liberties
Dr. Chelsea Brown 2009. ( PhD from Univ of North Texas; post-doctoral fellow at Southern Methodist Univ.,
Tower Center for Political Studies) Democracys Friend or Foe? The Effects of Recent IMF Conditional Lending in Latin
America, http://ips.sagepub.com/content/30/4/431.abstract
Structural adjustment is commonly prescribed as a condition for receiving loans from the World Bank and the
International Monetary Fund, but the effects of structural adjustment and conditionality are controversial. While much
research has been devoted to examining the economic effects of conditional lending, far fewer studies have looked at the
political consequences. How do conditional lending agreements affect democracy? Does the number of required reforms
or the type of reform play a role? Neoliberal theory suggests that improved economic conditions will result from
structural adjustment, and over time this should lead to higher levels of democracy. Conversely, democratic practices may
decline in the presence of conditionality as the government reduces civil liberties in an attempt to quell the social unrest
that results from structural adjustment. Using a sample of Latin American countries from 1998 to 2003, this
article analyzes the effects of both the number and type of required conditions on democracy and
finds that while the presence of an IMF loan itself does not affect democracy, loan with a high
number of required reforms have a deleterious effect on democratic practices.
IMF has fueled dictators
The IMF has a long history of fueling ThirdWorld dictators. IMF loans and bailouts are government to
government transfers. A Joint Economic Committee study says that, evidence suggests that the IMF knowingly makes loans
to corrupt governments while recognizing that some of its loan conditions and procedures can create circumstances
promoting additional corruption. The IMF has given taxpayer funds to the Mubarak regime in Egypt and the
Gadhafi regime in Libya. Its clear that these IMF loans have hurt the average citizen in these
authoritarian nations.
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A2: IMF Surveillance

No Enforcement
Edwin M. Truman (Ph.D in economics from Yale University. Senior fellow at the Peterson Institute for
International Economics since 2001, was assistant secretary of the Treasury for international affairs (19982000). He
directed the Division of International Finance of the Board of Governors of the Federal Reserve System (1977 98) & served
as a member of numerous international working groups on international economic & financial issues Institute for
International Economics, "Strengthening IMF Surveillance: A Comprehensive Proposal") December
2010;http://www.iie.com/publications/pb/pb10-29.pdf
One of the major criticisms of IMF surveillance is that it is toothless not only in the sense that such surveillance
rarely reaches crisp conclusions but also in the sense that in the few cases where the IMF does or might reach
such conclusions there are no consequences for the country or countries involved. Without consequences,
countries, in particular those that do not face an actual or potential need to draw on IMF resources, feel free to
ignore the IMFs views
Suppressed Information
Failed to warn of crisis
Alan Beattie (Masters of Phil. Economics, Cambridge; Former economist at the Bank of England; Currently he is
the International Economy Editor of the Financial Times) Financial Times, "IMF struggles to find its crisis voice" July 24,
2012 http://www.relooney.info/0_New_14390.pdf
The International Monetary Funds role got a
blast of disdain last week with the publication of a

resignation letter from Peter Doyle, a 20year fund veteran, obtained by CNN, accusing the organization
of failing to warn about the crisis because of persistent pro-European bias and analytical risk aversion.
Not only did the IMF fail to sound the alarm in advance, but the renewed turmoil in Spain and the rising probability of a full
blown international bailout lend urgency to the accusation that the funds financial involvement in the rescues for Greece,
Ireland and Portugal have hampered its ability to speak frankly in public about the Eurozone since.
Its loans hinder the ability to speak freely

The International Monetary Funds role got a blast of disdain last week with the publication of a resignation letter from Peter
Doyle, a 20year fund veteran, obtained by CNN, accusing the organization of failing to warn about the crisis because of
persistent pro-European bias and analytical risk aversion. Not only did the IMF fail to sound the alarm in
advance, but the renewed turmoil in Spain and the rising probability of a fullblown international bailout
lend urgency to the accusation that the funds financial involvement in the rescues for Greece, Ireland
and Portugal have hampered its ability to speak frankly in public about the Eurozone since.
Argentina Example.
It would not be the first time that the IMF has suppressed disquiet about countries whose rescue
programs are manifestly failing, the most notorious example being the funds disastrous lending to
Argentina in the years before that countrys 2001 sovereign debt default.
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Conflicted interests
Alan Beattie (Masters of Phil. Economics, Caimbridge; Former economist at the Bank of England; Currently he is
2012http://www.relooney.info/0_New_14390.pdf
In the case of the eurozone, the potential for institutional overoptimism is even higher, and not just
because the IMF board is disproportionately dominated by Europeans. The fund is a junior financing
partner in the eurozone rescues, and pulling the plug would incur the wrath of its fellow troika
members the European Commission and the European Central Bank as well as the borrower
country.
IMF Veteran
Peter Doyle (formerly a division chief in the IMFs European Department responsible for non-crisis countries;
& Advisor Employee for the IMF for over 20 years) Letter explaining Resignation, June 18, 2012
http://cnnibusiness.files.wordpress.com/2012/07/doyle.pdf
After twenty years of service, I am ashamed to have had any association with the Fund at all.
This is not solely because of the incompetence that was partly chronicled by the OIA report into the global crisis and the TSR
report on surveillance ahead of the Euro Area crisis. More so, it is because the substantive difficulties in these
crises, as with others, were identified well in advance but were suppressed here. Given long gestation periods
and protracted international decision-making processes to head off both these global challenges, timely sustained warnings
were of the essence. So the failure of the Fund to issue them is a failing of the first order, even if such warnings may not have
been heeded. The consequences include suffering (and risk of worse to come) for many including Greece,
that the second global reserve currency is on the brink, and that the Fund for the past two years has been
playing catch-up and reactive roles in the last-ditch efforts to save it.
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A2: Keeps countries from defaulting

More prone to debt crisis
Countries are more prone to sovereign debt crises if an IMF intervention took place in the previous one,
two, three or four years. These results are at odds with the idea that IMF lending prevents looming
liquidity crises from unfolding in the short run while induced moral hazard becomes the dominant effect
over a longer time horizon. Instead, the short run increase in default probabilities may even be seen as
supportive of the idea that insufficient IMF lending programs trigger sovereign debt crises.
A2: Lost Jobs

After we close IMF, the workers would be more productive elsewhere
Ian Vasquez 2009. (director of the Cato Institute's Center for Global Liberty and Prosperity. He is a member of the
Mont Pelerin Society and has been a term member of the Council on Foreign Relations; masters degree from the School
of Advanced International Studies at Johns Hopkins University) Quoted in interview with Radio Free Europe/Radio
Liberty, Does Economic Downturn Mean New Role, Or No Role, For IMF?
http://www.rferl.org/content/Does_Economic_Downturn_Mean_New_Role_Or_No_Role_For_IMF/1566497.html
I don't think that the IMF actually has a role to play. I think that the world would be better off if we abolished
the IMF. That doesn't mean that that army of economists and smart people who work there would suddenly
disappear and we would lose that talent. It means that they would start working in other agencies, in some
banks, and in other consulting agencies, and we would have a competitive situation where countries paid to get good
advice, rather than the other way around, where the IMF pays its clients to take its advice. When you pay your clients to
take your advice, you get perverse results.
A2: Lost Lender of Last Resort

Mario Blejer (PhD economics & former Governor of the Central Bank of Argentina) Eduardo L. Yeyati (PhD
economics and Professor of Economics at Universidad Torcuato Di Tella & Senior Fellow at the Brookings
Institution) "Keep the IMF Out of Europe" December 2011
There are at least three reasons why the IMF should resist this pressure, and abstain from increasing its
(already extremely high) exposure to Europe. First, and most obviously, Europe already has its own in
house lender of last resort. The European Central Bank can make available all the euros needed to
backstop Italys debt. And printing them would only offset, through mild inflation, the effects of the otherwise Draconian
relative price adjustment that is taking place under the corset of the common currency. So it is puzzling that some
observers have saluted the IMFs involvement as a virtuous effort by the international community to
bring the listing European ship to port. Why should the IMF (or, for that matter, the international
community) do for Europe what Europe can but does not want to do for Italy? Why should international
money be mobilized to pay for European governance failures?.
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A2: Conditionality will solve

One size fits all approach
Costas Panayotakis (Associate Professor of Sociology at the New York City College of Technology. PhD Sociology;
B.A economics) "On Assigning Blame for the Greek Tragedy" July 26, 2012
http://www.nytexaminer.com/2012/07/on-assigning-blame-for-the-greek-tragedy
"In reality, of course, the IMF has a long record of structural adjustment programs that have squeezed
dry workers and ordinary citizens around the world in order to ensure that their foreign creditors get
their money back. And, as Joseph Stiglitz among others pointed out more than ten years ago, Greece is
certainly not the first country to fall victim to the IMFs cookiecutter approach with its inability and/or
unwillingness to take into account in its programs the unique socioeconomic circumstances of specific
countries.".
A2: Countries get paid

Adds to national debt
Defenders of the IMF claim that it imposes no cost to US taxpayers. The members of the IMF supply funds
when the IMF requests a capital expansion. As of 1999 the total U.S. contribution to the IMF was $68 billion. U.S.
Appropriations bills claim that U.S. contributions to IMF funds will not be counted as an outlay and will not increase the
deficit, because each dollar provided is a loan. Former U.S. Treasury Secretary Robert Rubin claimed that the IMF has not
cost the taxpayer one dime" But economic reality differs from accounting superficialities. IMF loans are
deliberately below market rates. The interest that the U.S. government obtains from its IMF accounts has
usually been less than the U.S. Treasurys cost of borrowing, i.e. of U.S. Treasury bonds. The
Congressional Research Service has calculated that in real terms the IMF has added at least $4.6 billion
to the U.S. national debt.
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A2: U.S. Interests

Wasted resources
What of America's interests? We should have long ago resisted throwing our scarce resources, through
the IMF or otherwise, into the sinkhole of defending the euro. The currency was always conceived to be as much
a political statement as an economic policy: Its European proponents believed the euro would enhance Europe's strength as an
alternative and perhaps rival to America.
No U.S. Benefit
Today's
IMF does little or nothing for US national interests, especially when we face enormous
domestic economic challenges. Why should Washington not support Carstens, break the EU hold on the IMF and stop
IMF support for the euro? An added irony: Many Europeans criticize Carstens for his University of Chicago education, when
economics perspective is exactly what the IMF (indeed, Europe itself) needs.
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Source Indictments
IMF has biased authors
The Independent Evaluation Office (IEO) (n autonomous body established in 2001 to conduct independent evaluations
of policies & activities of the International Monetary Fund) "Research at the IMF Relevance and Utilization" 2011
http://www.ieo-imf.org/ieo/files/completedevaluations/1.1%20Main%20Report.pdf
Third, there
is a widely held perception that IMF research is message driven. About half of the
authorities held this view, and more than half of the staff indicated that they felt pressure to align their
conclusions with IMF policies and positions. Policy recommendations provided in some research
publications did not follow from the research results, and a number of country authorities and
researchers noted that IMF research tended to follow a preset view with predictable conclusions that
did not allow for alternative perspectives. This detracted from the quality and credibility of studies and
reduced their utilization.
Page 46 of 46

Abolish The IMF

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IMF: Affirmative Extension

IMF Reform 2ac

A2: Loans foster Growth........................................................................................................................37

IMF: Affirmative Extension

IMF: Affirmative Extension

IMF: Affirmative Extension

C. Coordinate through the Economic and Social Council

Economic and Social Council].

IMF: Affirmative Extension

The IMF/World Bank are part of the UN- IMF website

IMF: Affirmative Extension

D. IMF stated purposes

IMF: Affirmative Extension

Not much better off

IMF: Affirmative Extension

C. IMFs definition of itself

IMF: Affirmative Extension

E. US pays the most towards the Fund

F. Lending is only part of what the IMF does

b. How IMF lending works

IMF: Affirmative Extension

4. Current Lending power

IMF: Affirmative Extension

Lending can create more problems

Failed to prevent spread of crisis

IMF: Affirmative Extension

IMF: Affirmative Extension

More likely to default

IMF: Affirmative Extension

A. Make Financial crises worse

Uncertainty (caused by bailouts) causes underperformance in world economy

IMF: Affirmative Extension

IMF creates the problems it sets out to fix

IMFs debt policies increase poverty

Detrimental to weak countries

IMF: Affirmative Extension

Ideology increases poverty

IMF: Affirmative Extension

2. Encourages Recklessness Behavior (Moral Hazard)

of the IMF would make their culpability

Leaders held accountable

IMF: Affirmative Extension

Helps undermine commitment to fix the problem

Reduces incentive to fix economy

Causes Debt Cycle

Bad decisions are left unpunished

IMF: Affirmative Extension

Fund encourages recklessness

Offers bailouts to stay in business

Hey, Free money!

IMF: Affirmative Extension

Bailouts fundamentally unjust

IMF: Affirmative Extension

IMF loans usually become permanent

IMF creates long term dependency

IMF: Affirmative Extension

5. Taxpayers stuck paying

US is the largest contributer

Forced to pay for Greece bailouts

IMF: Affirmative Extension

We have little authority on the IMF

At the expense of taxpayers

American taxpayers forced to pay