Our Backdoor Bailout of Greece

The other day we were talking about Greece and the potential economic damage to the EU. "Do we care?" was the question.

After reading John Mauldin on the Big Picture, I'd say we care:

It now looks like almost 30% of the Greek financing will come from the IMF, rather than just a small portion. And since 40% of the IMF is funded by US taxpayers, and that debt will be JUNIOR to current bond holders (if the rumors are true) I can’t tell you how outraged that makes me.

What that means is that US (and Canadian and British, etc.) tax payers will be giving money to Greece who will use a lot of it to roll over old bonds, letting European banks and funds reduce their exposure to Greece while tax-payers all over the world who fund the IMF assume that risk. And does anyone really think that Greece will pay that debt back? IMF debt should be senior and no bank should be allowed to roll over debt and reduce their exposure to Greek debt on the back of foreign tax-payers.

I don’t think I signed on for that duty.

I certainly didn't.

I realize a taxpayer doesn't get a say in where every dollar gets spent - but you have to wonder how we arrived at a point where the Federal Reserve owns bankrupt shopping malls, the US is piping money to European banks via AIG and now somehow we're holding the equity tranche of Greece's bailout loans.

I mean, we're the biggest debtor nation on the earth, yet somehow we keep agreeing to pick up everyone's tab? How does that make any sense?

Late Edit: Barry stomps on this idea rather hard saying US exposure on Greece default amounts to $3 billion.