The Impossible Mission Fund

Ken Rogoff, of the International Monetary Fund, explains why countries that receive IMF loans often suffer austerity.

More often than not, the country has over-extended itself financially through some combination of imprudence and bad luck. Countries come to the IMF precisely because they know that it will lend to them when no one else will...IMF loans thus relieve austerity: they help governments limit the amount of budgetary belt-tightening required in a crisis...

saying that it causes austerity is like saying that doctors cause plagues.

Discussion Question. Argentina recently defaulted on an IMF loan. Will this reduce the austerity that Argentina will have to suffer?