The failure today in the Senate the so-called “reform” of the International Monetary Fund is an encouraging moment. Senator Reid had tried to tie the scheme, a lunge for money, to the Ukraine rescue, but then retreated, saying the IMF part of it would not have been able to pass the House. His retreat will enable the $1 billion package for Ukraine to go through, but it bitterly disappointed President Obama, who — as Judy Shelton warned the other day in the Wall Street Journal — didn’t want to let the Ukraine crisis go to waste. There is little doubt that Mr. Obama and the European Left will be back with a new attempt to get the “reform” through.

The dissembling of the Treasury Department and the IMF’s leadership has been just shocking, even for Washington. The IMF managing director, Christine Lagarde, issued an op-ed piece in the Wall Street Journal this morning, saying, among other things: “The IMF reforms come at no additional cost or risk to the American taxpayer. Money that Congress already appropriated five years ago will simply be transferred from a temporary fund at the IMF into its permanent resources.” Translated into plain English that means: “You know that temporary loan you made to the IMF? We’re keeping it.”

The fact is that the reform under discussion would move some money out of a facility called “New Arrangements To Borrow.” NAB is money which America and others have lent to the IMF. Our share, which is north of $100 billion, is a loan. We are owed it back. What Mrs. Lagarde and her camarilla are talking about doing is removing from the NAB the money American taxpayers have lent them and making it part of the permanent quota of the IMF, which means we don’t get it back. It’s gone. This kind of switcheroo is usually played with three walnut shells and a pea.

It’s worse than that, as Heritage has been pointing out. (Heritage has a lot of time-in-grade in battle with the IMF, going all the way back to the early 1980s, when we had, in Ronald Reagan, a president who understood the IMF’s game.) The Treasury Department has been creating a false sense of urgency to the IMF money grab. It disputes the notion that the “reform” will cost billions, when in fact it would double the American quota — “$63 billion more taxpayer dollars,” is the way Heritage characterizes the damage.

President Obama’s “reform” would also mean a reduction in our ability to control what is done with the money we advance. Once money goes out of the NAB and into IMF quota, use of it no longer requires specific American approval. Plus, the reforms being hatched would end America’s ability as a matter of right to decide who will represent it on the IMF’s board. Heritage has been emphatic on this head, warning that America’s president “might not be able to name someone to the IMF who shared his or her political and economic philosophies.”

All this aside, the real problem with the IMF is that it is spreading socialism at a time when the world needs more free-market capitalism. The countries that have been under IMF tutelage have been disasters; the IMF pushes for tax increases. It dispenses abroad the kind of advice that wouldn’t get to first base in the Congress. We are coming up on the 70th anniversary of the IMF. That’s a long time without a fundamental review of the whole enterprise. By our lights, its last logic disappeared in 1973, with the advent of fiat money. We wouldn’t advance one fiat cent to the Fund absent a top to bottom review by Congress of whether there’s any logic left in it.