Seems like we could use this situation to reform the IMF and the World Bank

[Ken Burch]

Everybody knows the U.S. basically calls the tune in both institutions.

If we can't actually get rid of them(yet)shouldn't there be some way to use the present crisis to reshape them, so that countries gaining their assistance aren't forced to impose economic policies that destroy their economies, destabilize their political systems, and end up forcing those countries to default.

Isn't there a possibility to at least get the IMF and the World Bank to stop demanding massive austerity and a "race to the bottom" in exchange for assistance? At the moment, the way they act is like a doctor insisting that, in exchange for a kidney transplant, the patient agrees to losing a leg. Especially greater instability in other places is now clearly going to damage our own financial situation here.

What's everybody else here think?

[terisan]

1. I honestly don't think we have the influence we used to have. Poorer countries

have been voicing opposition to our borrowing for our economic recovery, as they think it will put them at a massive disadvantage in borrowing for their needs.

China has just signaled grave concern about our economy and suggested a possible need for a different reserve currency, and we have just had some trouble selling our 5 year treasury notes.

The Fed has just begun flooding our economy with over a trillion in new dollars raising the specter of hyper-inflation.

The administration has just added to our potential risk of bankruptcy by taking on the toxic asset plan to help the investment banks.

I applaud your concern for the countries in the thrall of the IMF and World Bank and think you and others would be doing good to get changes made.

However is it possible that if almost all countries in danger of defaulting do so--would there be anything anyone can do to them?