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4-1 Discussion: The International Monetary FundWhen should a government, economy, or country be bailed out, if ever? Justify youranswer with specific examples and how the bailout or lack of bailout would impact theglobal economy and the future of globalization.A government, economy of country should be bailed out when the situationbecomes those of a depressed nature, warranting an assist to more than half thecitizens. Two big examples of this are the Great Depression of the late 1920’s andmost recently the COVID-19 pandemic we are currently living in. Had there beenno bailouts economies and countries around the world would be in desperatesituations, unemployment, homelessness and welfare situations would be out ofcontrol. The idea behind the bailouts is to stabilize the economy, I think bailouts indire situations are necessary.Ideally, which countries or organizations would provide the economic support for agovernment that needs a bailout? Is the IMF the ideal organization to bail out a country?Is it ethical for the IMF to bail out countries that repeatedly make bad economic andfiscal decisions? Is it ethical for the IMF to have significant requirements attached to itsloans?The IMP includes 189 countries, the IMF is funded through membershipsubscriptions countries pay, and the IMF in turn uses the funds to bailout othercountries in need. The top contributors to the IMF are the U.S., China, Japan andGermany. The IMF is globally run and is not run by any one specific country, it hasleaders running it that have one main goal to see global success not politicalstandings. The idea is to lend monetary assistance to a country in need, the ideaof bailing out countries in need to sustain an economy is a great idea, until you arerepeatedly bailing out the same countries. At some point bailing out the samecountries, there may need to be a review of the spending to understand why abailout is not working and money is repeatedly going to the same location for thesame situation. Deciding on ethics in a situation is always a difficult situation, asethics themselves are hard to define and may differ from one individual or countryto another. In regard to the IMF bailing out the same countries over and over, Ithink it is ethical as the IMF is considering the country as a whole, including all ofthe citizens that are being impacted when bailing out a country. The governmentsrequesting the bailout are those at fault if they do not right the ship and have toreturn for more funds from the IMF. This lends way into the significantrequirements the IMF may attach to a loan, I think it is absolutely ethical to attachthe requirements, the requirements are what justify the means, they will keep thecountry/government on track and held to a certain standard to ensure they load ispaid back.
What lessons should be learned from the Greek debt crisis for countries with debtobligation issues and for organizations such as the IMF?
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how the country got to that point and a look at the plan for the future will help