Beating the drum against more aid for the IMF
Newsletter publisher Howard Ruff is trying to get taxpayers to speak up against additional funding for the International Monetary Fund, a subject that causes even many business people to feel suddenly drowsy.
The IMF is a multinational organization that lends countries money to help them meet short-term gaps between what they owe and what they can earn from exports.
Free the Eagle, a lobbying organization Mr. Ruff formed in 1980, claims to have spent at least $1.2 million and sent out 4.5 million letters over the last several months, urging Americans to write their congressmen to oppose an increase in United States funding for the IMF.
''Its inflationary implications are indeed awesome,'' argues Mr. Ruff, author of the best-selling book ''How to Prosper During the Coming Bad Years.''
While Free the Eagle has provided most of the money for the campaign, the anti-IMF funding coalition ranges from Ralph Nader's Congress Watch organization , which holds liberal positions, to the conservative Council for a Competitive Economy. Other members include the Environmental Policy Center and the National Taxpayers Union.
Ruff and his allies have not stopped at trying to get constituents to flood congressional offices with post cards. On Tuesday they held a rally near the limousine-packed driveway at IMF headquarters, where the organization's governors held the first sessions of their annual meeting this week. And they have funded an anti-IMF advertising campaign which is running this week on Washington radio stations.
''Everyone is in this for different reasons, and some reasons would be different than ours,'' Mr. Ruff admits. He opposes an additional $8.5 billion US contribution to the IMF due to what he claims are its inflationary implications.
''If we dump a whole lot more debt on these (debtor) countries, in the next recession they won't be able to manage (payments). That could lead to the collapse of the banking system or an incredible flood of newly printed money,'' as central bankers move to shore up the banking system.
Opponents of stepping up the US stake discount the danger of a shock to the world financial system if Congress fails to give final approval to additional funding and if IMF lending is not sufficient to meet the need.
''There is a 1-in-5 risk now, as opposed to a virtual certainty three or four years from now, if we keep piling money on them,'' Mr. Ruff asserts.
''Futher funding is only adding to the danger in the future,'' says David L. Keating, executive vice-president of the National Taxpayers Union. He adds that ''we don't like to see taxpayers assuming the risk for (loan action) others took in expectation of making a profit.'' At the moment, the IMF funding measure has passed both houses of Congress, but is expected to face serious difficulties when it moves to a conference commitee.
President Reagan argued in a speech Tuesday that failure to pass the measure could lead to a major disruption of the world's trading and financial systems.
The Taxpayers Union sponsored a poll, conducted in August by Louis Harris & Associates, which found that 77 percent of those surveyed opposed more US funding for the IMF, while only 16 percent favored an increase.
Supporters of the IMF funding measure admit that Free the Eagle and its allies have had an impact. ''They have been politically effective,'' says Katherine Young, director of international monetary policy at the US Chamber of Commerce, which strongly supports the funding measure.
''I think the bill is in trouble,'' she says. ''Unless those groups and organizations (in favor) convey their support to Congress, we could face the likelihood of not getting (additional) funding.''
As a result, groups that favor passage - including the chamber, the National Association of Manufacturers, the American Bankers Association, and the AFL-CIO - are examining ways to step up pressure for the measure.
And even Mr. Ruff admits that the battle over additional IMF funding is not won. ''It is going our way, but it is too close to call,'' he says.