COMMENTARY The International Monetary Fund's request to increase its lending capacity by $500 billion was a failure even before it was made. No one is going to give it the money and, even if someone had, the IMF knows it wouldn't have been enough.
The Washington-based lender wants the half-trillion dollars to address what it sees as a trillion-dollar need for financing. The IMF currently has $385 billion on hand to bolster struggling governments and finance systems. I went to public schools, so I may need you to double-check my math on this. Isn't that about $100 billion short of the mark? That may not be much in the halls of high finance, but for us mere mortals it sure looks like a lot.
Not that it matters, really. They aren't getting the money.
In an unprecedented display of fiscal restraint, theU.S. has just announced it won't donate. This is probably because it's broke, although Lord knows that's never stopped it before. This is why the IMF has focused its efforts on China, Brazil, Russia, India, Japan and oil-exporting nations. (Is this like an NPR pledge drive? Give $50 billion and get a coffee mug; $100 billion, and it's tote-bags for everyone in your government.)
- Russia just said it won't make a decision until after its elections in March. Given that the results of those elections have been known for years, that is a "nyet."
- Japan is even more broke than the U.S., believe it or not, and is still trying to recover from last year's tsunami/nuclear meltdown.
- China and India are both discovering how quickly an economy can flame out and will need more cash for themselves. Even when the economy was booming, Beijing always said nice things about efforts like this but never quite got around to putting the check in the mail.
That leaves us with Brazil and OPEC. For some reason -- probably because they're not fools -- I have trouble imagining them coughing up a quarter-trillion each. Maybe the IMF should hold off asking until Mardi Gras. Brazil tends to be a bit distracted then.