The Daily Signal - How China Would Benefit From a Key Change to International Monetary Fund Policies

Episode Date: February 12, 2021

Rep. French Hill, R-Ark., recently wrote an op-ed for The Wall Street Journal on House Democrats' efforts to require the International Monetary Fund to issue special drawing rights to all member countries. What is the agenda and goal here? "All the third world countries that [China has] loaned money to over the last 10 years and taken strategic minerals, commodities, oil, and gas reserves as collateral suddenly have hard currency to pay them back," Hill notes on the podcast, discussing this and more: We also cover these stories: On Thursday the Senate held the third day of the trial to impeach former President Donald Trump.  President Joe Biden has made good on his promise to halt funding for construction of the U.S. Mexico border wall.  Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases and chief medical advisor to President Joe Biden, says he thinks the coronavirus vaccine will be available to everyone by April.  Hosted on Acast. See acast.com/privacy for more information. Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Daily Signal podcast for Friday, February 12th. I'm Virginia Allen. And I'm Richard Del Judas. Democrats are wanting to use the International Monetary Fund to shower money on developing economies to beat COVID-19, according to a recent op-ed by Congressman French Hill of Arkansas. Why is this not a good idea? And how would it impact the global economy? Congressman Hill joins me today on the Daily Signal podcast to discuss. Don't forget. If you're enjoying this podcast, please be sure to leave a review and a five-star rating on Apple Podcasts and encourage others to subscribe. Now on to our top news. On Thursday, the Senate held the third day of their trial to impeach former President Donald Trump. Lead House impeachment manager, Congressman Jamie Raskin, a Democrat of Maryland, maintained that Trump incited the violence that led to the January 6th riot via CBS evening news. unavoidable knowledge of the consequences of his incitement, the unavoidable knowledge of the consequences of his incitement, and the clear foreseeability of the violent harm that he unleashed

on our people in our republic. January 6th was not some unexpected radical break from his normal law-abiding and peaceful disposition. This was his state of mind. This was his essential MO. He knew that egged on by his tweets, his lies, and his promise of a wild time in Washington to guarantee his grip on power, his most extreme followers would show up bright and early, ready to attack, ready to engage in violence, ready to fight like hell for their hero. And Democrat Representative Ted Liu hinted at the fact that lawmakers may vote to bar Trump forever running for office again via USA today. It's not just about the past.

It's about the future. It's making sure that no future official, no future president does the same exact thing President Trump does. President Trump's Lackenmore shows that he will undoubtedly cause future harm if allowed, because he still refuses to account for his previous high grave crime against our government. You know, I'm not afraid of Donald Trump running again in four years. I'm afraid he's in run again and lose because he can do this again. A vote to convict Trump would require two-thirds of the Senate, all 50 Democrat senators, and at least 17 Republican senators.

President Joe Biden has made good on his promise to halt funding for construction of the U.S. Mexico border wall. On Thursday, Biden issued a letter to congressional leaders explaining that he was lifting the National Emergency Declaration, at the southern border, which allowed federal funding to be diverted to wall construction efforts. I have determined that the declaration of a national emergency at our southern border was unwarranted, Biden wrote in the letter, adding that I've also announced that it shall be the policy of my administration that no more American taxpayer dollars be diverted to construct a border wall, and that I'm directing a careful review of all resources appropriated, or redirected to that end. On Wednesday, White House press secretary Jen Saki said that due to the

ongoing pandemic, the majority of immigrants seeking asylum will be turned away. Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases and Chief Medical Advisor to President Biden, says he thinks the coronavirus vaccine will be open to everyone by April. Here's what he told The Today Show via The Today Show. And real quickly on that, let me just zero in on it. You mean for everybody, the general population, go into your pharmacy, getting a shot, you don't have to be in one of those risk groups? Well, you know, Savannah, we have those priority, one A, one B, one C.

If you look at the projection, I would imagine by the time we get to April, that will be what I would call for, you know, for better wording, open season, namely virtually everybody and anybody in any category could start to get vaccinated. From then on, it would likely take several more months just logistically to get vaccine into people's arms so that hopefully as we get into the middle and end of the summer, we could have accomplished the goal of what we're talking about, namely the overwhelming majority of people in this country having gotten vaccinated. Now stay tuned for my conversation with Congressman French Hill on the International Monetary Fund and Coronavirus. Americans use firearms to defend themselves between 500,000 and 2 million. every year. But God forbid that my mother has ever faced with a scenario where she has to

stop a threat to her life. But if she is, I hope politicians protected by professional armed security didn't strip her of the right to use the firearms she can handle most competently. To watch the rest of Heritage expert Amy Swearer's testimony on assault weapons before the House Judiciary Committee head to the Heritage Foundation YouTube channel. There you'll find talks, events, and documentaries backed with the reputation of the nation's most broadly supported public policy research institute. Start watching now at heritage.org slash YouTube. And don't forget to subscribe and share. I'm joined today on the Daily Signal podcast by Congressman French Hill of Arkansas. Congressman Hill, it's great to have you back on the Daily Signal

podcast. Rachel, it's great to be with you. Thanks. Well, thank you for again for being with us. It's great having you. So you just wrote an op-ed for the Wall Street Journal on House Democrats and their efforts to require the International Monetary Fund to issue special drawing rights to all member countries. So before we get more in depth on this, can you just tell our listeners about what the International Monetary Fund is and what its function is? You bet. So after World War II, the International Monetary Fund is one of those multilateral vehicles that was created for primarily taking money from wealthy countries and making sure there's an effort to help countries get through tough times in a foreign exchange challenge.

So when a country has got too much debt or it needs to work through a short term, repeat, short term kind of financial struggle in their country, the IMF can loan them short term money to help them get through a tough time. So Democrats in Congress are proposing that the IMF extend nearly $3 trillion. in hard currency to all 190 countries that are part of the IMF in the name of fighting the pandemic. And Republicans just absolutely disagree with that. Both the World Bank and the IMF have other ways they can help poor countries struggle with fighting COVID-19. And that was actually one of my follow-up questions.

What is the agenda here to shower all this money on these developing countries? countries. Why is there all of a sudden this, you know, urge to do this when that's not the job of the institution to begin with? Well, at taking the best case scenario, Rachel, it's wealthy countries wanting to help the poorest struggling countries with too much debt meet their budgetary needs in the short one to fight COVID-19 and get their economy open. Of course, that's the taking the positive side. But I find it ironic that China is. is the biggest suggestor that this needs to be done. The governor of the Chinese central bank has been championing this issue. And, of course, China is a large creditor country, doesn't need money, and yet they would get almost $200 billion from this process, and, more importantly, to China, all the third world countries

that they've loaned money to over the last 10 years and taken strategic minerals, commodities, oil and gas reserves as collateral, suddenly have hard currency to pay them back. So in my view, a more pernicious issue is that China's lobbying for this because they stand to benefit, and it also part of that hard currency basket is the Chinese currency. And so this is a way for them to extend even more of their currency around the world in bank accounts. One other point you make in the op-ed is that congressional Democrats are pushing for special drawing rights. And so can you talk a little bit about why they're doing that as well as just

explain briefly what these special drawing rights are? Special drawing rights are a way and it's a very blunt instrument. It allows the IMF to provide hard currency to its member countries. But it cannot distinguish between a rich country like the United States or the Netherlands and a poor country like Nigeria or the Congo. It cannot distinguish between democracy or loving countries with free market capitalism that are doing well in tackling the virus and authoritarian dictatorships that are centers of terrorism. This bill, if the Democrats got their way, would give billions of dollar to Iran, Syria, the Assad regime in Syria, Venezuela, the Maduro regime.

So it's a way to get hard currency in the hands of countries, but it is a blunt instrument. It has to be given to all the countries on the same basis. And I think that's another reason why it absolutely should not be pursued by the Congress. Well, as you just mentioned, and you point out in the op-ed, this plan from the Democrats would send about 20 billion of special drawing rights to a grant, and another 75 billion would go to the Kremlin. And I just want to hear about why are Democrats so intent on giving money to places like Iran where they're like a known enemy. Like what is, is there a hidden agenda here?

Like to put it bluntly, like what is, what is their, what is their strategy? I think it's a combination of naivete. I'm not sure all the Democrats even know what this policy actually does or how it actually works. I hate to say that, but that's my view, because as you know, a concern over states' sponsors of terrorism like Iran and the Assad regime For example, Russia have not been supported by a strong bipartisan majority in the Congress. So I think part of it is I'm not sure they understand what their policy is that they're advocating. If they truly want to help poor and impoverished countries get back on their feet after COVID-19, there are two ways to do that.

First of all, David Malpass, who runs the World Bank, has a loan program for poor countries that is helping them get vaccine distribution and long-transign. term development loans to help them get through the COVID-19 economic challenges. Secondly, the IMF has two small funds that already exist, already exist, that are for short-term emergency purposes to help countries get through this kind of a catastrophe. So the only ulterior motive that I've come up with that's concerning to me is that the lead advocate outside the IMF and outside the Democratic Party to do this is China. How do you expect the Biden administration to respond to these requests and even lobbying

from Democrats for these special drawing rights? What do you foresee happening? Well, during the calendar year 2020, Democrats in the House and Senate attempted to put forward this policy through the National Defense Authorization Bill, through the omnibus spending bills, and we were able to stop it, because the Trump, Treasury. opposed to this approach. And as I say, I've led an effort on Capitol Hill to oppose it. So we are going to press the Biden administration and Secretary Yellen, Secretary of Treasury Yellen, to oppose the special drawing rights approach of Democrats and in turn support the targeted, already authorized efforts, both at the World Bank and at the IMF to help our poor

countries get back on their feet. Well, looking at this, for more of a thousand foot angle overall, how would Democrats' efforts to require the International Monetary Fund to issue these special drawing rights to these member countries, how would that do more harm than good overall to the global economy if you're just looking at this, you know, from a very big wide angle? I think on the wide angle, two issues. One, it can't be targeted. So you're injecting into the world economy, about $3 trillion in hard currency that goes, as I say, to both rich countries like the United States, China, the Netherlands, the United Kingdom, as well as poor countries and those who are state sponsors of terrorism. So you're putting hard currency out in the hands of a lot of countries

who don't need it. Therefore, that could be a very inflationary signal in the global economy as the economy recovers and vaccines are extended around the world. So lack of targeting, a tremendous injection of liquidity, as I say, that's going to people that don't need an injection of liquidity, which could be a major contributor to a global inflation. Well, and lastly, Congressman Hill, what would your message be to maybe colleagues in the House who are on the fence about this and maybe you still haven't made up their minds about how they're going to go forward with this? What would your message be to them? My message would be like in this, in any of our fights against COVID-19 and reopening our economy, both here at home and around the world, we want strategic, targeted relief, not across the board, one-size fits all inappropriate, just sheer money spending. So my thought and my suggestion to my colleagues on both sides of the Hill is to support David Malpas' efforts to get vaccines out to the countries through the World Bank. and to use the International Monetary Fund, the IMF, use their small trust funds that will help the most hard hit countries in the third world and get them the resources they need to recover.

Well, Congressman Hill, thank you so much for joining us on the Daily Signal podcast. It's always great having you with us. Rachel, it's always great to be with you. We look forward to seeing you soon in person. Exactly. Thank you again. And that'll do it for today's episode. Thanks for listening to the Daily Signal podcast. You can find the Daily Signal podcast on Google Play, Apple Podcasts, Spotify, and IHeartRadio.

Please be sure to leave us a review and a five-star rating on Apple Podcasts and encourage others to subscribe. Thank you again for listening. And Monday is President's Day, so we'll not have a podcast, but we look forward to being back with you all on Tuesday. Have a happy President's Day. The Daily Signal podcast is brought to you by more than half a million members of the Heritage Foundation. It is executive produced by Kate Trink. and Rachel Del Judas, sound designed by Lauren Evans, Mark Geinney, and John Pop. For more information, visit DailySignal.com.