Ex-Im bank often funds the purchase of airplanes by foreign carriers which compete with American firms. A vast majority of its efforts are with airplane manufacturers such as Boeing, which according to Timothy Carney of The Washington Examiner, shockingly accounted for 90% of Ex-Im’s loan guarantees in 2009. The unfair competition, while good for Boeing, has been bad for airlines such as Delta, which was forced to stop a popular international route because it could not compete with a foreign airliner receiving Ex-Im subsidies.
It is a myth that government must run a bank to make up for a supposed market failure. If a company cannot find private funding sources, that should be a giant red flag as to why taxpayers should not be handing them money. And new, unconventional ways for risky ventures to raise capital, such as crowdfunding and micro-investing, are far more useful than anything government could develop.
Investment gimmicks subject to endless political pressure by central-planners are dubious and inherently inefficient ways to invest money. The unintended consequences of government-backed loans have been disastrous and continue to encourage companies to lobby Congress for special perks and privileges at your expense. This is a form of European-style socialism, and it is time to stop repeating failed policies.
Fiscal conservatives in Congress must make the Ex-Im bank an “ex-bank.”
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