It is unfair and unwise to ask US taxpayers to fund bailouts for EU countries while America racks up huge deficits.
And it’s unlikely that Greece will be the last major EU member to seek financial help. High-debt Portugal, Spain and Italy could all face similar crises soon. Piero Ghezzi, an economist at Barclay’s Capital, estimates that Spain may need a $450 billion bailout. Italy might well need more.
The United States pays 17 percent of total member contributions to the IMF; No. 2 Japan provides just 6 percent. That entitles us to a claim on the overall IMF balance sheet, not a share of any specific loan — but it still means that our “share” of the $40 billion IMF package for Greece is equivalent to $6.8 billion.
Last year, Congress passed another $100 billion line of credit to the IMF — funds the IMF said will go “to forestall or cope with an impairment of the international monetary system or to deal with an exceptional situation that poses a threat to the stability of that system.”
In other words, the “too big to fail” doctrine is being expanded to an international level — with the United States as the primary stakeholder.