What The G-20 Really Authorized

Why do politicians do these things? The NYT put the much lauded G-20 monetary commitments in perspective this evening.

“The lack of concreteness in the numbers is troubling, because further down the line, they’re going to have to come to grips with the details,” said Eswar S. Prasad, a former China division chief at the International Monetary Fund who now teaches at Cornell University.

About $500 billion of the $1 trillion represents increased direct financing for the International Monetary Fund. But, by Mr. Prasad’s count, less than half of that has so far been committed by Japan, the European Union, Canada and Norway. China is expected to kick in $40 billion, which it may do by buying bonds issued by the fund.

Treasury Secretary Timothy F. Geithner has committed the United States to $100 billion. But that must be authorized by Congress, which, administration officials acknowledge, is skeptical of foreign aid and may be doubly so this time, given its heavy spending on domestic stimulus.

Even counting the United States, Mr. Prasad said that left a shortfall of $145 billion of the $500 billion in donations. Among potential donors are Saudi Arabia and other Persian Gulf states and emerging markets like India. Their willingness to pay, however, will hinge on getting a bigger voice in the fund’s affairs.

Other efforts like the increase in trade credits and SDR’s are inflated as well. The group arrived at its figures by some double counting and adding to facilities that already exist and just get rolled over. All in all there seems to be a lot of fluff in the numbers.

At some point it may occur to the political class that more people than ever are looking over their collective shoulders. More to the point, those watchers are not at all shy about speaking truth to power. Being called to account for performance might be a novel experience for them.

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