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The government chartered entity was founded to foster commerce between our nation and the Soviet Union.
As with many federal programs, the Export-Import (Ex-Im) Bank of the United States began as an economic recovery program in the midst of the Great Depression, created to increase American trade. The premise was simple: foster domestic job growth through extending and guaranteeing loans to and assuming risk to aid international buyers of our exports.Related posts:
Seventy-eight years later, the credit agency has ballooned into a $100 billion bureaucracy that drains and puts taxpayer coffers at risk, creates inequalities in the marketplace and actually harms American companies by helping their foreign competitors through government-funded subsidies. The Ex-Im Bank deserves to be retired now. Unfortunately, Congress is poised to reauthorize the agency and inexplicably raise its lending cap by a stunning 40 percent before its charter expires at the end of May.
To understand how unnecessary the Ex-Im Bank has become in the 21st century global economy, consider its miniscule role in the marketplace. U.S. goods and services exports last year totaled $2.1 trillion, meaning the Bank's overall contribution is negligible at most. It's questionable financial management practices and lack of congressionally-mandated internal controls have also made the program a liability to taxpayers. Loans, guarantees and insurance that the Ex-Im bank finances have risen from $12.6 billion in 2007 to $32.7 billion in 2011. Yet the reserves on hand to cover potential losses is actually $1 billion less over that period of time, declining from 6.8 percent of total exposure to only 4.6 percent. Our risk exposure has exponentially grown at the worst possible time, given the world economy's overall poor health and credit exposure.
Most egregiously, the Ex-Im Bank is yet another case of the federal government picking winners and losers in the marketplace. The program is corporate welfare that plays favorites, distorts markets and actually makes it tougher for some American companies to compete, putting more American jobs in jeopardy than it creates. A chief example is the American airline industry, where Ex-Im has expended much of its lending.
Obama on Ex-Im bank in '08: Little more than a fund for corporate welfare
Kill the Export-Import Bank
Export-Import Bank a friend of big business, 'zombie' Air India, and the defunct Soviet Union
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