A trend has taken shape in Washington, and it has put our country on a devastating path towards potential fiscal ruin. The trend is characterized by an unsustainable penchant for spending money we don’t have. It became crystal clear in last year’s debt ceiling negotiations and was further highlighted by the recent debate surrounding the fiscal cliff; our country is broke, yet our government continues to spend more, risk more and accumulate more debt. Entitlements are often blamed for the vast majority of our spending issues, but our tendency to overspend is not restricted to just these. Parallels exist across the spectrum of government agencies – each case portraying the same doomed philosophy that threatens the solvency of our entire economy. A telling example is the Export Import Bank (Ex-Im): an anti-free-market institution that consistently risks billions of public dollars for the sake of corporate welfare.
The Ex-Im Bank is a taxpayer-backed federal agency charged with financing U.S. exports to countries around the world. Through the use of direct loans and loan guarantees, the Ex-Im Bank facilitates the sale of U.S. made products to entities and nations that would otherwise be unable to obtain them. With a massive budget backed by the goodwill of the American taxpayers, one would hope the Ex-Im Bank is both transparent and generally risk-averse in its practice. It turns out, it is not.
Directed by politically-driven backroom deals, the Ex-Im Bank’s portfolio of investments is a hodgepodge of hits and misses. Consider the following: Solyndra, prior to its bankruptcy, received a $10.3 million from the Ex-Im Bank. Las Vegas solar plant Amonix, which has seen severe financial troubles, received a nine million loan guarantee from the Ex-Im Bank. Abound Solar, prior to its bankruptcy, took in $9.2 million from the Ex-Im Bank. Notice a pattern? For a government organization who financial agreements are backed by U.S. taxpayers, the Ex-Im Bank seems to ignore common sense investing principles, choosing instead to make a remarkable number of risky bets. Where the Ex-Im Bank is successful with its investments, it is detrimental to free-market competition.
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