Editore"s Note
Tilting at Windmills

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May 13, 2010

PENCE'S BAILOUT CONFUSION.... Rep. Mike Pence (R-Ind.), the easily confused chairman of the House Republican conference, has a new issue he's especially excited about: the notion that Americans are "bailing out" Europe.

He's issuing all kinds of press releases about it, and rumor has it, Pence is even weighing new legislation to prevent such a development. "The bailout of Greece set a dangerous precedent of using American tax dollars for other European bailouts," Pence argued this week.

It's probably worth setting the record straight.

First, the International Monetary Fund -- which is 17 percent financed by American taxpayers -- says it is prepared to contribute up to $321 billion to the relief effort, with certain caveats.

Generally, the IMF says it will require countries receiving assistance to enact stringent deficit fighting measures, which would force nations such as Portugal and Spain that might be next in line for assistance to undergo bruising internal political fights to rein in their social spending in exchange for the aid.

Second, the Federal Reserve has reopened so-called swap lines that allow it to lend dollars to the European Central Bank in exchange for euros, which helps pump dollars into the EU economy.

The Fed has also opened swap lines with the Bank of Japan, the Bank of England and the Swiss National Bank. The Fed used a similar mechanism during the height of the 2008 financial crisis but had wound down the program as the crisis eased late last year.

How much will this cost American taxpayers? Nothing. The Fed's swap lines tend to make money, not lose money. And since the IMF is already fully funded, it's not like Congress will have to spend additional resources. Besides, as the White House is quick to point out, Americans have never lost money on IMF investments.

By Pence's reasoning, every time the IMF has ever intervened to help anyone, it constitutes an American "bailout" of the aided nation. Since U.S. administrations of both parties have supported IMF for decades, Pence should have started whining years ago.

The alternative to this ongoing response in Europe -- which, again, won't cost taxpayers an additional dime -- is a far more serious problem that would adversely affect Americans.

In other words -- stop me if you've heard this one -- Mike Pence has no idea what he's talking about. The fact that congressional Republicans have put him in a position of authority, and he'll likely play a key role in shaping federal policy if the GOP retakes the House, is more than a little scary.

Steve Benen 9:30 AM Permalink | Trackbacks | Comments (15)

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"Pence should have started whining years ago"

Yes, but years ago he couldn't try to score cheap points with a bunch of xenophobic Teabaggers.

That calendar thingy has always been a problem for Republicans. They keep forgetting that they were for something then and they are against it now and we have the videos to prove it.

Posted by: madstork123 on May 13, 2010 at 9:38 AM | PERMALINK

Your assumption seems to be that Pence is stating his opinion as part of the political process of governing.

However, it is as likely that instead he is providing rhetoric to appeal to a group in the electorate and to shape perceptions of the policy and the Democratic party. In a word, he's "signaling."

Posted by: Amy on May 13, 2010 at 9:42 AM | PERMALINK

Could also add that the GOP statement doesn't take into account fact that EU member countries are also significant contributors to IMF funds.

Posted by: Bill on May 13, 2010 at 9:49 AM | PERMALINK

***sigh*** ok, now everyone say it with me, you just can't fix stupid....

Posted by: cmm on May 13, 2010 at 10:10 AM | PERMALINK

In other words -- stop me if you've heard this one -- Mike Pence has no idea what he's talking about.

And let's also reiterate, for all his xenophobic whining, that Pence voted gleefully for the illegal Iraq invasion (as well as extending the Bush tax cuts), which contrary to the European situation, actually is saddling American taxpayers with an astronomical, crippling amount of debt. Funny how those problems just disappear down the memory hole for these fool rightwingers.

Posted by: electrolite on May 13, 2010 at 10:11 AM | PERMALINK

Pence simply doesn't care whether it's true or not. "Bailout", "Europe", and "American tax dollars" make all the right people bust a cranial blood vessel, and that's that.

Posted by: MattF on May 13, 2010 at 10:19 AM | PERMALINK

Look, Pence knows that sooner or later we're gonna hafta "go up agst Yurp."

Look at that god damn drain on our oil out in the Gulf, man! The Brits did that! What part of BRITISH petroleum do you not understand? Huh?

Can't you see? We gotta protect the American people from squanders like the Yurp peons!

Not to mention our precious body fluids!

Posted by: neill on May 13, 2010 at 10:33 AM | PERMALINK

They don't call him, "Pence, the Dense," on The Hill for nothing.
A friend of mine, who works for an agency that comes in frequent contact with Congress, clued me into this.
My friend says that Pence may the single dumbest member of Congress, which is really saying something...

Posted by: c u n d gulag on May 13, 2010 at 10:54 AM | PERMALINK

You need to remember that the GOP leadership has consciously abandoned the old traditions of meaning what they say, trying to maintain a consistent position, or reflect reality in what they say.

Anything Mike Pence says publicly is merely a political positioning signal, intended to move him and/or the GOP up, or knock the Democrats down. It has no actual informational content beyond that, and by no means should be taken as a sign of what he actually knows or thinks. Had W. proposed the identical action, Pence would be talking about how brilliant it was and how vital it was to our national security.

All statements by Mitch McConnell are the same way. They aren't even pretending otherwise anymore.

Posted by: biggerbox on May 13, 2010 at 11:00 AM | PERMALINK

What an idiot! Another Republican who purposely ignores the facts to excite the emotions of the right wing. Seems that the Republican habit of disparaging intelligence and dismissing the highly educated as "elitist," as evidenced in the 2008 campaign, has created a brain deficit within their own ranks. Instead of provoking high levels of critical thinking, questioning, and reasoning, Republicans appeal to the baser instincts- the emotional reactions of self-preservation, fear, anger, and hate. Pence is using the usual Republican tactic of taking a complex problem, such as healthcare, energy/environment, or finance reform, boiling it down to a simplistic, emotional issue to create fear that "change" will cause the "American way" to be stolen away from them. With feather-headed lightweights like Mike Pence, Eric Cantor, John Boehner, Michele Bachmann, G.W. Bush and Sarah Palin, is there any wonder that low information voters tend to support Republicans? That's how they roll, and Fox News is right there to promote it.

Posted by: Carol A. on May 13, 2010 at 11:01 AM | PERMALINK

Can't believe I'm writing this, but Mike Pence has a point.

I've got no problem with the ECB-Fed swaps, that's routine stuff. But I don't like the IMF involvement in Greece either. Poor EU management was entirely for responsible for the problem, and the EU should shoulder the clean-up on its own. They have the resources to do this, and the IMF should only be called in when there is no alternative. Also, the IMF will expend resources on this problem, so it may have to come back to the U.S. with requests for additional funding.

Plus, there is a conflict of interest. IMF head Strauss-Kahn is likely to run for president of France. Considering how he has repeatedly abused power for sexual favors (well documented), I'm not comfortable with his involvement in the euro rescue package.

Posted by: g. powell on May 13, 2010 at 11:01 AM | PERMALINK

Does anyone know the EU share of the IMF budget? Isn't it about the same as the US share?

Posted by: Joe Buck on May 13, 2010 at 1:00 PM | PERMALINK

That Europe's problems might spread to the US and further damage his constituents in Indiana is apparently beyond Pence's intellectual grasp.

Posted by: bob h on May 13, 2010 at 1:01 PM | PERMALINK

Could he be thinking(?) about the Fed? The Fed supposedly bailed out a bunch of banks that were holding CDSes or some kind of toxic derivative.

Posted by: CDW on May 13, 2010 at 3:45 PM | PERMALINK

Pence would likely have opposed the Marshall Plan as well...


Posted by: Zorro on May 13, 2010 at 8:07 PM | PERMALINK



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