Spending our way out of a crisis is something new for the U.S., and the policy is taking many citizens aback. But to no one does the spending craze seem stranger than to the inhabitants of the rest of the hemisphere. After all, the U.S. is now reacting to its financial crisis in the very fashion it always told our neighbors not to.rnConsider what must be running through minds in Mexico. Mexicans remember all too well their country's 1995 financial crisis: Politicians had spent wildly before an election; then the government devalued the peso, scaring investors, who lost confidence in Mexico and pulled out. The U.S. Treasury and the IMF moved in to stabilize the peso, with our Treasury helping to arrange loans and assistance worth more than $50 billion. But many U.S. lawmakers didn't like the idea. Representative George Miller (D-Calif.) complained that "the bailout rewards speculators playing with middle-class money. The only thing that can correct the crisis is the marketplace, not a bailout." Here, Mr. Miller was repeating a standard line from what is known as the Washington Consensus, the doctrine that markets, not government, are the solution to financial crises in wayward Latin American countries.
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