[Congressional Record Volume 144, Number 146 (Wednesday, October 14, 1998)]
[House]
[Pages H10884-H10885]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    MORE MONEY TO IMF WILL ONLY MAKE WORLD ECONOMIC SITUATIONS WORSE

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Vermont (Mr. Sanders) is recognized for 5 minutes.
  Mr. SANDERS. Mr. Speaker, let me begin by expressing my strong 
objection to the current legislative process in the House. Some day 
soon, we do not know, maybe tomorrow, maybe Friday, maybe Saturday, 
eight appropriations bills, which as I understand it will add up to 
some $500 billion, will be dumped into one omnibus bill. Members here, 
with relatively little knowledge as to what is in that legislation, are 
going to vote for it. I think that is a pretty poor process.
  What is of particular concern to me is that within that huge omnibus 
bill will be, as I understand it, an $18 billion appropriation for the 
expansion of the IMF, the International Monetary Fund.
  Now, it seems to me that in a time when we are cutting back on 
veterans' benefits, when 43 million Americans have no health care, when 
millions of middle-class families are unable to afford to send their 
kids to college, that maybe, just maybe, we might want to have an open 
debate upon the wisdom of putting $18 billion of taxpayers' money into 
the IMF. Maybe we would like to hear the pros and the cons of that 
discussion. Maybe we would like to see an up-or-down vote on that 
issue. But I guess that is not going to happen.
  Mr. Speaker, President Clinton wants the IMF. The gentleman from 
Georgia (Mr. Gingrich) wants the IMF. Every large multinational 
corporation in this country wants the IMF. The corporate media wants 
the IMF. And, I guess, they are going to get the IMF without any 
serious debate.
  But let me just say a few words about the IMF. I happen to agree with 
those people who say that the international economy is in a fragile 
state right now and that the United States has got to act. I disagree 
with those people who say that the solution is to pour more money into 
the IMF.
  In my opinion, if recent history is any indicator of what might 
happen in the future, giving more money to the IMF might only make a 
bad situation, an unstable situation even worse. All we have to do is 
take a hard look at what has happened throughout the world in those 
countries which the IMF has ``helped'' to understand that maybe the IMF 
path is not the road that we want to go down.
  They ``helped'' the people of Mexico several years ago. Today, as a 
result or partially as a result of their help, the Mexican economy is 
in disastrous condition. Wages are down. Unemployment and child labor 
are up. And their Congress in Mexico is now addressing a massive 
bailout of their banking system.
  But something did happen out of the Mexican bailout of several years 
ago. That is that the investors that we bailed out, the large banks and 
speculators, learned a very important lesson. They learned that the 
taxpayers of the United States would be there no matter how ill-advised 
or stupid their investments might be, no matter how much money they 
might lose. No problem, Uncle Sam was there to bail them out.
  They took that lesson to Asia, and they continued that process. They 
pumped huge sums of money into Thailand and Malaysia and Indonesia and 
South Korea. And then, when that part of the world began to suffer, no 
problem, the President, Mr. Rubin and Mr. Summers and everyone said 
well, we have got to bail them out again, and we bailed them out again.
  We bailed out major banks and financial investors because we do not 
want them to lose any money. Small businesspeople, family farmers, hey, 
they can lose money. But when it's the Chase Manhattan Bank, they are 
not supposed to lose money. They only make money, I suppose.
  Then the meltdown in Russia began. Poor Russia. It is incredible that 
a great country with such a tragic history has got to suffer all over 
again. When communism fell in 1991, the Russian Government received the 
attention and the guidance of the IMF and all of their wonderful policy 
advisors. Tragically, the Russian Government listened to them and took 
their advice. It is fair to say that never before in modern history has 
a major industrialized Nation experienced the kind of decline in a 7-
year period as Russia has under IMF guidance and with $20 billion of 
IMF loans.
  Mr. Speaker, those people who are asking our taxpayers for $18 
billion in order to expand the functioning of the IMF are telling us 
that the global economy is in a fragile state, economic contagion is a 
reality, and that the United States could well suffer if the crisis in 
the global economy is not addressed.
  Well, let me say this, I believe that the global economy is in a 
fragile state, economic contagion is a reality, and that the United 
States could well suffer if the crisis in the global economy is not 
addressed. But I very strongly differ with our friends who believe that 
another $18 billion will make the situation better. In my opinion, if 
recent history is any indicator of what might happen in the future, 
giving more money to the IMF will only make a bad situation worse. Four 
years ago when Mexico was in dire economic circumstances Mr. Rubin, Mr. 
Greenspan, President Clinton, Mr. Gingrich, corporate America, and all 
of the Corporate media told us that we would have to pony-up and bail 
out investors who had lost money in that country. We were told that if 
Mexico went under the contagion would spread, and there would be an 
international economic disaster would occur. Well, some of us fought 
very hard against that bail out, but we lost. Today, the Mexican 
economy is in disastrous condition, wages are way down, unemployment 
and child labor are way up, and their congress is now addressing a 
massive bail out of their banking system.
  But something did happen out of the Mexican bailout, the investors 
that we bailed out,

[[Page H10885]]

the large banks and speculators, learned a very important lesson. They 
learned that the taxpayers of this country would be there to make sure 
that no matter how stupid or ill-advised Uncle Sam and the American 
taxpayers were there to protect their interests. And, with that 
knowledge in mind, these reckless and irresponsible international 
investors poured huge sums of money into Asia and Russia--with the full 
confidence that the U.S. Government and the IMF would be there to bail 
them out again if they suffered any losses.
  Last year, when Thailand, Malaysia, Indonesia, and South Korea 
suffered their economic meltdown, Mr. Rubin, Mr. Greenspan, Newt 
Gingrich, President Clinton, and corporate America, were chanting their 
mantra again. And in unison they cried out ``Let's bailout the banks 
and financial investors who lost money doing business in Asia because 
if we don't the contagion will spread.'' And, against my vote and my 
strong opposition, the IMF bailed out Asia.
  And then the meltdown in Russia began. Poor Russia. It is incredible 
that a great country with such a tragic history has got to suffer 
again. When communism fell in 1991, the Russian government received the 
attention and the guidance of the IMF and all of their brilliant policy 
advisors, and tragically the Russian government listened to them and 
took their advice. It is fair to argue that never before in modern 
history has a major industrialized nation experienced the kind of 
decline in a seven-year period as Russia has under IMF guidance, and 
with $20 billion of IMF loans.
  In Russia today millions of workers are unpaid, old people do not 
receive their pensions, and hunger and malnutrition are very serious 
concerns. Russia's GDP has fallen by at least 50 percent, capital 
investment by 90 percent, and meat and dairy livestock herds by 75 
percent. A nation that, despite their inefficient and bureaucratic 
system, used to be one of the great agricultural and manufacturing 
producers in the world now imports a majority of its food and produces 
almost nothing. And, as we all know, Russia has recently defaulted on 
its loans.
  Meanwhile, in Russia a handful of people who have accumulated 
billions of dollars, much of it illegally and through swindles, have 
enormous power over that country which is rampant with corruption. At a 
hearing that Spencer Bachus and I held last week, two economists from 
Russia, one from the left and one from the right, both stated that it 
would be foolish to give the IMF money because that money would simply 
disappear in corruption and not help the Russian people.
  Given the horrendous record of the IMF in making life worse for the 
people of Mexico, worse for the people of Asia, worse for the people of 
Russia--not to mention all of the suffering that ``austerity programs'' 
have caused in Africa and Latin America, why in God's name would anyone 
want to continue along the incredible path of failure that has been 
developed by the IMF?
  Now I should add, however, that while the taxpayers of this country 
are at risk for IMF expenditures, and while people throughout the world 
are suffering as a result of IMF policy, not everybody gets hurt. In 
country after country where IMF policy has developed, the richest 
people in those countries invariably become richer, and we now have the 
absurd situation in which 358 of the wealthiest people in the world own 
more wealth than the bottom 45 percent of the worlds population, or 2.3 
billion.
  The United States cannot turn its back on the world's economy, and we 
must address the very serious economic situation which is unfolding, 
but we must do it in a new way. Our goal must be to develop sustainable 
economies in countries throughout the world, not boom or bust economies 
designed to make foreign investors rich. Our goal must be to make the 
United States an ally of the poor and the hungry, not a spokesman for 
the rich, the powerful, and the corrupt.
  Mr. Chairman, this is the opinion of Bernie Sanders. Now let me quote 
from some other sources about the role that the IMF has played. ``It's 
only a bit of an overstatement to say that the free-market, IMF, Bob 
Rubin, and Larry Summers, model is in shambles,'' said John S. 
Wadsworth, Jr. who runs Morgan Stanley's operations in Asia.
  According to a Wall Street Journal editorial from July 20, 1998 ``The 
IMF helped create the very crisis that Mr. Camdessus says he now needs 
more money to solve.'' According to Congressman Carlos Heredia, 
representing 126 deputies in the Mexican Congress, ``Contrary to the 
view promulgated by the Clinton administration and the U.S. media, the 
packaging of 12.5 billion from the ESF and 17.8 billion from the 
International Monetary Fund to bail out Mexico benefited only foreign 
investors and a small group of already wealthy Mexican investors while 
wreaking havoc on our national economy.''
  A letter from 140 American and international environmental groups, 
labor unions, and development organizations says and I quote, ``the 
disastrous impact of IMF-imposed policies on workers rights, 
environmental protection, and economic growth and development; the 
crushing debt repayment burden of poor countries as a result of IMF 
policies; and the continuing secrecy of IMF operations provide ample 
justification for denying increased funding to the IMF.''

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