There is no way to avoid the costs imposed by bad economic policies of the past. The best course for the future is to encourage market forces, stronger private property rights, price stability, and a floating exchange rate for the peso. Only by strengthening the institutions that produce such results will Mexico raise its standard of living.
Loans from the United States and international agencies such as the International Monetary Fund and the World Bank can arrest a crisis in the short run but are counterproductive in the long run. The new world order is one of market solutions, not government intrusion. To foster such outcomes the United States should pass legislation that eliminates the Treasury’s ability to make foreign loans (through the ESF) and that removes the ability of the Federal Reserve (through swap lines) to extend credit to foreign central banks directly or indirectly by funding the ESF. Congress should also withdraw its support for the IMF and the World Bank.
