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>> Moreover, when a government overspends, the ill effects of that overspending typically hurt the poorest the hardest. > This is usually inflicted on them by

>> Moreover, when a government overspends, the ill effects of that overspending typically hurt the poorest the hardest. > This is usually inflicted on them by the lender of last resort, the IMF. Is what way? I’ve never heard of the IMF demanding this. The method of “austerity” or reducing a deficit could very well include taxes on the rich. It is a local choice to hurt the poor instead (and then blame the IMF).

pjc50 8y ago
> I’ve never heard of the IMF demanding this Not to be rude, but that can only mean you've not been paying attention. Stiglitz wrote an entire book on the subject, "Globalization and its discontents": https://www.theguardian.com/business/2002/jul/06/globalisation https://www.theguardian.com/business/2002/jul/06/globalisati... The IMF were notorious for providing the same advice to different countries with only the name changed (and in one anecdote of his, forgetting to do the search and replace). They are still at it: https://www.taxjustice.net/2018/07/06/the-damage-of-international-monetary-fund-conditionality-call-for-urgent-rethink/ https://www.taxjustice.net/2018/07/06/the-damage-of-internat... Currently going on in Jordan: https://www.alaraby.co.uk/english/news/2018/6/3/thousands-protest-in-jordan-over-imf-backed-austerity-measures https://www.alaraby.co.uk/english/news/2018/6/3/thousands-pr... > reducing a deficit could very well include taxes on the rich. It is a local choice to hurt the poor instead No, the IMF demands specific changes as part of the loan conditionality.
- dnautics 8y ago
  Its still a negotiation process; the imf is probably just lazy, procedurally and intellectually... In the end, if they get their money back they don't care that much. For many countries politically wheedling out of their obligations is a real strategy, and the easiest way to do this is to discredit international lending, which, in turn is easiest to do by inflicting the pain of austerity on the poorest instead of the politically connected.
  - pjc50 8y ago
    You're denying that the IMF imposes austerity conditions as part of the loan agreements? Have you tried looking for the actual text of these? Edit: your argument is - IMF requires laws XYZ as part of loan agreement - country implements XYZ exactly as required - this is the fault of the country not the IMF? Please cite examples of countries successfully "wheedling out of" or defaulting on the IMF.
    - dnautics 8y ago
      Not at all. Please reread my comment, carefully.
    - Retric 8y ago
      Greece’s tax evasion issue adds up to ~7% GDP. Fixing that and doing nothing else would have mostly solved the problem, but that’s not what happened. Really collect back taxes for the last 5 years and they could have laid down a massive amount of debt.
- 317070 8y ago
  Hey, do you have a source for this: > and in one anecdote of his, forgetting to do the search and replace I would be very interested in that (but could not find it myself).
  - pjc50 8y ago
    https://www.globalpolicy.org/component/content/article/209-bwi-wto/42760-what-i-learned-at-the-world-economic-crisis.html https://www.globalpolicy.org/component/content/article/209-b... (2000) "Critics accuse the institution of taking a cookie-cutter approach to economics, and they're right. Country teams have been known to compose draft reports before visiting. I heard stories of one unfortunate incident when team members copied large parts of the text for one country's report and transferred them wholesale to another. They might have gotten away with it, except the "search and replace" function on the word processor didn't work properly, leaving the original country's name in a few places. Oops."
MR4D 8y ago
Rich people tend to have asset outside their home country. Those assets tend to be hard to do things with. Poor people have all their assets inside their country. This is why poor people are more affected. As an example, think of a person who owns a building in another country. Kinda hard to tax. Especially if you don’t know it exists.
littlestymaar 8y ago
> Is what way? I’ve never heard of the IMF demanding this. Not during the past decade, because the IMF policy changed a lot during the early 2000s. But that was basically the recommendation of the IMF to the financial crisis in the 90s. See how it handled the Asian crisis: https://en.wikipedia.org/wiki/1997_Asian_financial_crisis#IMF_role https://en.wikipedia.org/wiki/1997_Asian_financial_crisis#IM...

pjc50 8y ago

> I’ve never heard of the IMF demanding this Not to be rude, but that can only mean you've not been paying attention. Stiglitz wrote an entire book on the subject, "Globalization and its discontents": https://www.theguardian.com/business/2002/jul/06/globalisation https://www.theguardian.com/business/2002/jul/06/globalisati... The IMF were notorious for providing the same advice to different countries with only the name changed (and in one anecdote of his, forgetting to do the search and replace). They are still at it: https://www.taxjustice.net/2018/07/06/the-damage-of-international-monetary-fund-conditionality-call-for-urgent-rethink/ https://www.taxjustice.net/2018/07/06/the-damage-of-internat... Currently going on in Jordan: https://www.alaraby.co.uk/english/news/2018/6/3/thousands-protest-in-jordan-over-imf-backed-austerity-measures https://www.alaraby.co.uk/english/news/2018/6/3/thousands-pr... > reducing a deficit could very well include taxes on the rich. It is a local choice to hurt the poor instead No, the IMF demands specific changes as part of the loan conditionality.

dnautics 8y ago
Its still a negotiation process; the imf is probably just lazy, procedurally and intellectually... In the end, if they get their money back they don't care that much. For many countries politically wheedling out of their obligations is a real strategy, and the easiest way to do this is to discredit international lending, which, in turn is easiest to do by inflicting the pain of austerity on the poorest instead of the politically connected.
- pjc50 8y ago
  You're denying that the IMF imposes austerity conditions as part of the loan agreements? Have you tried looking for the actual text of these? Edit: your argument is - IMF requires laws XYZ as part of loan agreement - country implements XYZ exactly as required - this is the fault of the country not the IMF? Please cite examples of countries successfully "wheedling out of" or defaulting on the IMF.
  - dnautics 8y ago
    Not at all. Please reread my comment, carefully.
  - Retric 8y ago
    Greece’s tax evasion issue adds up to ~7% GDP. Fixing that and doing nothing else would have mostly solved the problem, but that’s not what happened. Really collect back taxes for the last 5 years and they could have laid down a massive amount of debt.
317070 8y ago
Hey, do you have a source for this: > and in one anecdote of his, forgetting to do the search and replace I would be very interested in that (but could not find it myself).
- pjc50 8y ago
  https://www.globalpolicy.org/component/content/article/209-bwi-wto/42760-what-i-learned-at-the-world-economic-crisis.html https://www.globalpolicy.org/component/content/article/209-b... (2000) "Critics accuse the institution of taking a cookie-cutter approach to economics, and they're right. Country teams have been known to compose draft reports before visiting. I heard stories of one unfortunate incident when team members copied large parts of the text for one country's report and transferred them wholesale to another. They might have gotten away with it, except the "search and replace" function on the word processor didn't work properly, leaving the original country's name in a few places. Oops."

MR4D 8y ago

Rich people tend to have asset outside their home country. Those assets tend to be hard to do things with. Poor people have all their assets inside their country. This is why poor people are more affected. As an example, think of a person who owns a building in another country. Kinda hard to tax. Especially if you don’t know it exists.

littlestymaar 8y ago

> Is what way? I’ve never heard of the IMF demanding this. Not during the past decade, because the IMF policy changed a lot during the early 2000s. But that was basically the recommendation of the IMF to the financial crisis in the 90s. See how it handled the Asian crisis: https://en.wikipedia.org/wiki/1997_Asian_financial_crisis#IMF_role https://en.wikipedia.org/wiki/1997_Asian_financial_crisis#IM...