For decades, the Export-Import Bank (EXIM) has been one of the most significant examples of corporate welfare in the United States. Despite repeated calls for its abolition, the bank continues to subsidize some of the largest and most successful corporations in America, using taxpayer dollars to prop up businesses that do not need any additional support.
Established in 1934, EXIM provides loans, loan guarantees, and insurance to American companies that export goods and services overseas. The bank's mission is to support US businesses by providing financing that is not readily available in the private sector. However, in practice, EXIM has become a tool for large corporations to secure cheap loans and guarantees at the expense of taxpayers.
In recent years, the bank has become a political football, with some calling for its elimination and others arguing that it is necessary to support American businesses in a global economy. However, the reality is that EXIM is nothing more than a handout to big business, with no discernible benefit to the American economy.
Some of the corporations that EXIM has subsidized over the years include Boeing, General Electric, and Caterpillar, all of which are multinational corporations that do not need taxpayer dollars to stay afloat. In fact, Boeing, one of the largest beneficiaries of EXIM financing, reported over $10 billion in profits in 2022, while General Electric had a net income of $6.4 billion.
EXIM's subsidies to these corporations have been well documented. In 2014, for example, the bank provided a $3.4 billion loan to Brazil's state-owned oil company, Petrobras, to buy equipment from US companies such as General Electric and Caterpillar. Critics pointed out that Petrobras had a history of corruption and mismanagement, and that the loan was little more than a gift to large corporations.
Petrobras had been embroiled in a massive corruption scandal, known as Operation Car Wash, which involved bribes, kickbacks, and other illicit activities. Critics argued that providing such a large loan to a company with such a tainted history was not only irresponsible but also showed a lack of oversight on the part of EXIM.
The bank's defenders argue that EXIM is necessary to level the playing field with other countries that provide export financing to their own companies. However, this argument does not hold up under scrutiny. According to a study by the Mercatus Center, a libertarian think tank, the vast majority of EXIM's financing goes to large corporations that would have no trouble obtaining financing in the private sector. In fact, in 2018, over 75% of EXIM's financing went to just ten companies, most of which are multinational corporations.
Moreover, many economists argue that the bank's subsidies distort the market, favoring certain industries and companies over others. By providing cheap financing to large corporations, EXIM makes it more difficult for small businesses to compete, leading to a less efficient and less dynamic economy.
In 2015, Congress allowed the bank's charter to expire, and EXIM was unable to make new loans for several months. Despite dire predictions from its defenders, the American economy did not collapse, and the private sector stepped in to fill the void left by the bank. In the end, Congress reauthorized EXIM in 2019, but the debate over its usefulness and necessity continues.
The reality is that the Export-Import Bank is little more than a vehicle for corporate welfare, benefiting large corporations at the expense of taxpayers and distorting the market in the process. If we truly believe in free markets and limited government, then we should eliminate EXIM and let the private sector provide financing to American businesses. The American economy is strong enough to stand on its own, and we should not be using tax dollars to prop up large corporations that do not need any additional support.
Written By: Stephen Despin Jr.
Stephen Despin is a libertarian-conservative, blogger, and grassroots organizer, who's worked extensively in grassroots advocacy, campaigns, and lobbying for the past 6 years. As the founder of Talk Policy, he's become a voice in libertarian-conservative politics and has helped to shape the conversation around a variety of issues. Stephen is highly skilled in digital organizing and social media management and has been recognized for his ability to build effective and engaging online communities. He's a tireless advocate for limited government, personal freedom, and individual responsibility, and will continue to play an important role in shaping the libertarian-conservative movement.
originally posted at: The Export-Import Bank: A Corporate Welfare Machine | Talk Policy
