Greece 200-250 billion euro over 5 years? From the United States? IMF?

Barron’s reports today (May 1, 2010) that analysts think the Greece bailout could eventually cost [euro] 200 billion to [euro] 250 billion over five years and the analyst states “The reality is, they need to default.”  The population of Greece is around 10 million people which means a bailout of 20,000 to 25,000 Euros per person in Greece – which is US$26,000 to US$33,000 per person.

Where will the money come from?  Much of the money for a bailout of Greece will come from the IMF.  The question then become where will the IMF get the money and the answer is from its members and which member has the largest, by far, contribution?  The United States.  The United States pays three times more than the 2nd nearest contributor (37149 SDRs vs 13312 SDRs for Japan and 13008 SDRs for Germany).

The United States will be repaying a lot of the profligate spending by the Greeks. Then Portugal, Spain, Italy and Ireland.  This will encourage poor decisions in other countries because they believe the United States will BAIL THEM OUT.  It is bad enough we had to spend 100s of billions of dollars bailing out car companies and Wall Street firms, it is even worse to spend it overseas.

The United States should stop the bailouts of other countries immediately.  $30,000 per person in Greece is crazy.  What could you do with that much money?

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