It's Your Money
You might think that the very first thing the American taxpayer has the right to expect from a financial institution dedicated to maintaining monetary cooperation and the international balance of payments would be some honest bookkeeping. Especially when Uncle Sam is its largest contributor.</br></br>Think again.</br></br>Forget about looking for the answer in the U.S. budget. America's contribution to the International Monetary Fund is an off-budget item. And Congress has long preferred to pretend that the billions of dollars in loans that the U.S. makes to the Fund cost the U.S. taxpayer, as Treasury Secretary Robert Rubin put it in 1998, "not one dime." Naturally, this line of thinking is just fine with the IMF, which is happy to avoid the closer scrutiny that would be sure to follow if Congress ever admitted that its U.S. funding is not cost- free.</br></br>Though such logic (not to mention such arithmetic) was always suspect, a new study shows just how flawed it really is. The U.S. contribution to the IMF, says Adam Lerrick of the Gailliot Center at Carnegie Mellon University, has cost the U.S. an average of $1.5 billion a year since 1991. This year those costs will reach $1.9 billion. It sure would be nice if Congress noticed.</br></br>Mr. Lerrick reaches his conclusions using a set of facts that are difficult to argue with. Start with the fact the Fund makes large loans at low interest rates to such risky economies as Argentina or Indonesia or Russia -- countries that aren't like to repay soon (if ever).