US taxpayers could be on hook for Europe bailout

[dkf]

Fed policymakers meet next week to decide whether the flagging U.S. economy needs another round of easy-money measures that could include buying more Treasury bonds to push more cash into the financial system.

So far, no one has floated publicly the idea of the U.S underwriting a broader bailout of the European financial system. But Senate Republicans have already voiced concerns over such a move.

"Our concern is that innocent American taxpayers will pay for yet another bailout -- this time to one or several countries whose spending and debt choices led them to financial calamity,” Sen. Orrin Hatch, R-Utah, and seven other Republican senators wrote in a letter to Treasury Secretary Timothy Geithner in June.

The source of the senators' concern is an emergency provision, approved by the Group of 20 industrialized nations in 2009, granting the IMF broad powers to expand its lending authority. That could leave American taxpayers on the hook for any IMF loans that later go bad.

http://bottomline.msnbc.msn.com/_news/2011/09/16/7795342-us-taxpayers-could-be-on-hook-for-europe-bailout

[Turbineguy]

1. It's not organized so that US taxpayers have a choice.

If "too big to fail" US Banks sold default swaps and did not allow for reserves to back them we will be on the hook.

[DJ13]

2. I hope the WH understands how that will be portrayed by the MSM

If theres any way the admin can keep Geithner from backstopping another round of TBTF gambling debts, now would be the time to let the banks fend for themselves.

[bossy22]

10. I dont see whats so good with that idea

Geithner, Paulson, Bernanke et al. saved the U.S. from a full blow DEPRESSION. What good do you think would come of the likes of Chase, Citi, Goldman, Wells Fargo going under? I dont see much good, and whatever happiness you feel will soon be wiped away when you find out that you can't get a mortgage, your kid can't get a college loan, your employer can't get the necessary credit to keep his/her business open..etc. I'm not saying the big banks did nothing wrong- they fucked up- but letting them go under would have been horrendous for Main Street as well as Wall Street. Just look what Lehman did!

[TBF]

18. We're wiped out anyway. Only the rich have those things -

the precious banks you defend aren't lending right now, unemployment is high. Another defender of the status quo.

[RB TexLa]

3. That is part of our responsibility as part of the IMF. For people who love to talk about

responsibility they sure do get scare of it easy.

[Safetykitten]

4. Was waiting for someone to post this. The Bernank is not done yet.

[bossy22]

15. trying to save our economy?

I hope not! There is still alot of work to be done.

I've never understood why some people have this hatred for bernanke- especially on the left. It should be telling that many liberal economists praised the work of Bernanke, Paulson, and Geithner et al during the crisis (just look at Paul Krugman)

[moondust]

5. Isn't global capitalism wonderful?

Whose idea was it anyway? :nopity:

[TBF]

8. The only good thing about global capitalism -

is the hope that all workers will rise up to overthrow these bastards - worldwide.

[bossy22]

14. and then what?

we will go back to the barter system?

[TBF]

19. Don't even start with me on a monday morning

mr. red baiter.

Go back to your WSJ.

[amandabeech]

6. FRom another thread--U.S. banks have probably issued insurance

on Greek (and other weak euro countries) debt.

That means that BofA, Citi, Goldman, Morgan Stanley, etc. will have to pay off the losses that German and French banks will incur if Greece goes belly up.

That's on top of the IMF.

[ThomWV]

7. Didn't a good portion of the first bail out go to Europe too?

[seabeyond]

21. seems to me i recall reading that we have already given them a good chunk of money, yes. nt

[kentuck]

9. What I don't understand is how they can give trillions....?

to these overseas banks, but they cannot give the same money to cities and states to create jobs for the unemployed? What is the purpose of the Fed anyway??

[bossy22]

16. to provide liquidity to the nations financial system

its mandate though is to both control inflation and promote full employment

[TBF]

20. lol - love how that full employment is going. nt

[Fire Walk With Me]

11. This is just more disaster capitalism, and once again, WE are paying for it.

The banks are doing another shell game and we are forced to play.

[MadHound]

12. Gotta love the incestuous relationships of global capitalism

Our Treasury Sec is also an IMF governor, our Fed Chair is an alternate.

Meanwhile, we're going to get more inflation, and probably a bonus recession. The only ones who win in this are the rich and elite, as always. We the people get screwed, again.

[bossy22]

13. recession and inflation often don't go together

unless in the situation of Stagflation- but stagflation can only really be brought on by a rising in the price of essential goods (so that the normal supply and demand curve doesnt apply) such as food and oil. Inflation is not so much do to the size of the monetary supply as it is the velocity of the money supply- essentially, how fast money changes hands aka spent.

So what kind of monetary system would you prefer?

[TBF]

17. Did he say he wanted a different monetary system?

nt