Open Thread for Tuesday
As the value of the peso hit an all-time low, Clinton sidestepped Congress’ rejection of an earlier $50 billion loan proposal and exercised his executive power. Claiming that he was acting in the national interest and that national security was at stake, he authorized the Treasury Department to issue a loan through the Exchange Stabilization Fund. This was the first time the fund had been used to help stabilize a foreign currency. Clinton justified his decision by arguing that if the peso continued to fall, Mexico’s economy would crash and in turn negatively impact the United States. He warned that an insolvent Mexico might result in an influx of illegal immigration into the U.S., threatening American jobs and border security. Furthermore, he predicted that U.S. exports to Mexico would dwindle, disrupting the U.S. economy.