Ex-Im Bank Just Corporate Welfare
August 11, 1997
Experts say that the Export-Import Bank has long been known as "Boeing's Bank" for the support it gives the aircraft manufacturer on overseas sales. While Boeing isn't the only large company feeding at the federally-funded trough, 80 percent of Ex-Im Bank's financing assistance goes to medium and large companies, with just 15 big firms alone receiving about half the total assistance.
There are also some hidden costs and negatives in Ex-Im operations:
- For every $1 billion in federal loan guarantees made by the bank, between $736 million and $1.32 billion in private investments is crowded out within capital markets, according to University of Arizona economist Herbert Kaufman.
- The General Accounting Office has warned that the bank shifts production "within sectors of the economy rather than raise the overall level of employment...."
- The bank is unnecessary since the vast bulk of export financing comes from the private sector -- with the bank financing just 2 percent of total exports.
The bank has cost taxpayers $3.7 billion over the last five years and analysts are calling on Congress to dismantle it.
Source: Doug Bandow (Cato Institute), "Get Business Off Welfare: Shut the Ex-Im Bank," Investor's Business Daily, August 11, 1997.
Browse more articles on Tax and Spending Issues