International Monetary Fund

The International Monetary Fund (IMF) was created in 1944 as part of the Bretton Woods agreement. The Purpose of Bretton Woods was to “design a postwar international monetary system” (Hoover). The US dollar was made the worlds currency. The job of the IMF was to stabilize the exchange rate when each country would tie its currency against the gold backed dollar. In 1971 Nixon took the dollar off the gold standard because of nations like France who kept demanding to exchange dollars for gold. From 1971 forward the US dollar and many of the world’s currencies have been allowed to float freely.

The way the IMF works is it allows governments to borrow US dollars in exchange for local currency. Congressman Ron Paul has been an opponent of the IMF even requesting the US stop funding the group. As Paul has said, “the IMF forces American taxpayers to subsidize large, multinational corporations and underwrite economic destruction around the globe” (Paul). The IMF has a long history of funding governments creating economic disasters. A recent example was the Argentine economic crisis in 2001. The IMF lent Argentina over $8 billion of US taxpayer backed loans.

The history of the IMF is one of creating problems. The problem with the IMF in my opinion is the government to government loans that are made. Giving money to corrupt leaders and then expecting them to act rational does not exist. As Congressman Paul states, “The only constituency for the IMF is the huge multinational banks and corporation” (Paul).

The better way is what groups like Kiva Loans (kiva.org) and Bill Gates Foundation that will loan money to individuals within these poor nations to build a business or buy additional farming equipment. Kiva loans is an organization that allows anyone to participate in helping people become productive.

The Case against the IMF. Hoover Institution. http://www.hoover.org/publications/epp/2845951.html?show=essay

Paul, Ron. Statement on Ending US Membership in the IMF, Feb 27, 2002.
http://www.house.gov/paul/congrec/congrec2002/cr022702.htm