IMF-orchestrated bailouts of countries in financial crisis -- assistance to countries whose exchange rates are plummeting -- provide money primarily so that developing countries can pay off their foreign creditors, including private banks.

In 1995, the IMF contributed almost $18 billion to a Clinton administration bailout of the Wall Street interests which stood to lose billions with the peso devaluation in Mexico.

The same thing happened with the Asian financial crisis. U.S. banks had approximately $20 billion in outstanding debt in South Korea alone, with BankAmerica, Citibank, J.P. Morgan, Bankers Trust, the Bank of New York and Chase Manhattan the major banks with heavy exposure in South Korea. With the loans threatening to go bad, the IMF swooped in, pushed the government to take on the debts of failing private sector companies, and provided tens of billions of dollars to the government to pay off the debts owed to the private lenders.

The Korean bailout was particularly noteworthy for the conditions which accompanied it: South Korea was required to open its financial sector to foreign investors -- meaning the banks and international financiers who directly contributed to the financial crisis received a double benefit. Not only were they bailed out, they were given the right to penetrate the Korean financial sector.

The IMF went on to repeat the fiasco in Russia, where its August 1998 multi-billion dollar loans immediately left the country -- some directed to foreign creditors, much of it stolen and deposited in foreign bank accounts, and then later in Brazil and elsewhere around the world.

There are substantial costs to these bailouts. Not only do they waste taxpayer money, they encourage future imprudent loans by private lenders. Knowing that they can earn high returns on risky loans without fear of losing their money if the investments go bad, lenders and investors are encouraged to direct money to unworthy sources -- making future bailouts that much more likely.