The United States Should Withdraw From the International Monetary Fund

by Darrell Castle – Vice-Chairman Constitution Party National Committee

dscn0519Currently headquartered in Washington DC, the International Monetary Fund (IMF) was formed in 1944 and finalized in 1945 as part of the Bretton Woods agreement made by the victorious Allied Powers at the end of WWII.

The IMF’s stated purposes are as follows:

  • To promote exchange rate stability;
  • To facilitate and manage the growth and balance of international trade;
  • To provide resources to member countries experiencing balance of payments problems;
  • To help maintain a multilateral system of payments;
  • And finally, to promote international monetary cooperation.

Despite its stated purposes, many people believe that the real purpose of the IMF is to bring poorer, less-industrialized countries into the orbit of global government and multinational corporations.

According to John Perkins in his book Confessions of an Economic Hit Man, third world countries have been threatened with CIA destabilization and regime change unless they accept IMF loans. The loans are made with draconian repayment provisions like cutting social services, renegotiating union contracts and privatizing public services, which then allow foreign multinational corporations access to the country’s resources. Since these target countries often have their credit ratings downgraded, the loans also carry a very high interest rate.

Who funds the IMF or where does the “fund” in the IMF come from?

There are currently 187 IMF members, but the G-20 countries, meaning the top 20 economies, fund 71.21% of its revenue and the other 166 countries fund the other 28.79%. The United States share is 17.09% of the total. And Japan is second with 6.12%. Major decisions require an 85% super-majority to pass, and that makes the United States the only country that can block a super-majority on its own, because votes are commensurate with percentage of participation. The United States’ 17.09% allows it final veto over any major decision.

As most people know by now, the current head of the IMF – current at least until his recent resignation – French politician Dominique Strauss-Kahn, was placed in a New York City jail after being charged with sexually assaulting a maid at his $3000 a night suite in the Midtown Manhattan Sofitel. Could DSK, as he is affectionately known by his friends, make do with a $600-per-night room at the Ritz? No way, nothing but the best will do for the head of the IMF and the most likely candidate to replace Nicholas Sarkozy as President of France.

The maid who has accused DSK of rape is a West African immigrant with a 15-year-old daughter. Perhaps DSK reasoned that since the IMF has been raping her former continent for decades, what difference could one more rape make?

This sordid mess is made worse by the fact that the IMF, like most of its member states, usually runs a negative balance sheet, leaving in doubt which party will pay for the damage. In 2009, the IMF sold 200 tons of gold to close a deficit in the amount of hundreds of millions of dollars. Who will pay for DSK’s latest (alleged) debauchery besides himself?

Who will pay for DSK’s legal defense? The IMF has announced that it will sell some gold to cover that. The maid has a lawyer in addition to the NYC prosecutor’s office. I trust it will also sell enough gold to cover the several million that a NYC jury is likely to eventually award his victim.

The taxpayers of the United States should not be on the hook for one penny of his defense, damages, or even his $3000 per night hotel suite. In fact, if the political leadership of the United States had an ounce of decency left, it would announce the immediate withdrawal of the United States from the IMF. Tragically, they do not and thus will not.