The Obama administration is using a "national security" argument to justify a request to Congress to spend $108 billion on funding the International Monetary Fund, Reuters reports. "With adequate funding, the IMF will strengthen our national security by mitigating the economic crisis and inhibiting the growth of terrorist networks," says a letter to Congress from the secretary of state, the secretary of defense, and the national security adviser.
Well, that's one description of what the IMF does. Reading the IMF report (pdf) disclosed yesterday on the United States, though, one gets a sense that there are other activities, such as giving policy advice. The report says, "The policy response to the crisis has inevitably entailed a massive increase in the public role in the economy." Well, some would argue that this was not inevitable at all. And the word "public" seems like a euphemism for government. The report calls for tax increases to report that spending: "revenues will need to rise. Steps could include base broadening (including reducing the deductibility of corporate debt and household mortgage interest), introducing a federal consumption tax, hiking energy taxes, and strengthening compliance (the latter is being examined by the President's task force on tax reform)." Note the use of the word "and." Not "or," but "and."
So the Obama administration wants Congress to spend $108 billion to fund an international agency to tell Congress to raise taxes or create new taxes to pay for all the spending. There is something circular about this, no? "Inhibiting the growth of terrorist networks" is popular politically, but introducing a federal consumption tax on top of the existing tax system and increasing energy taxes while eliminating the home mortgage interest tax deduction is probably less of a political winner, which may be why President Obama has his defense secretary making the case for IMF funding and not his IRS commissioner.