Yesterday President Barack Obama asked his cabinet to make a total of $100 million in cuts among their departments. That was “fiscally responsible” President Obama. We like him. We just wish we got to see him more often.
Today, “reckless spending” President Obama is back at work, following through on his G20 summit pledge to loan $100 billion for world wide stimulus. Heritage fellow Terry Miller explains why such stimulus is a bad bet:
It is a spectacularly bad and high risk idea to pour vast new sums through failed or failing institutions. And that is what the IMF and World Bank are. Both have a woeful record of meeting their chief missions of, respectively, spurring economic development and encouraging responsible economic policies by recipient governments and seeing them through financial crises.
In the case of the World Bank, the preponderance of economic studies indicate that foreign assistance whether provided by the Bank or some other source, is not a key contributor to economic growth and development. That is particularly the case for the world’s poorest region, sub-Saharan Africa, which has yet to have a significant aid recipient escape poverty despite hundreds of billions in assistance from the Bank and other sources over the past five decades. Even leaving aside the Bank’s propensity for ignoring corruption in its own programs, there is little cause to plus up its funds.