Ex-Im Benefits a Few, Has Minor Impact on Exports
July 18, 2014
David Stockman, former Director of the Office of Management and Budget, writes that the Export-Import (Ex-Im) Bank -- a federal program that provides loans and loan guarantees to foreign purchasers of American products -- should not be reauthorized.
Stockman breaks down the details regarding Ex-Im financing:
- The Ex-Im bank was responsible for less than 2 percent of the $2.2 trillion in U.S. exports in 2013.
- Only $12 billion in Ex-Im funds were used to "meet competition from a foreign, officially sponsored export credit agency," meaning that just 0.6 percent of exports allegedly would not have occurred without Ex-Im financing.
- Of that $12 billion, $8 billion went to a single company, Boeing. Boeing's financial director has stated that the company could find alternative, non-Ex-Im, funding sources.
- In 2013, the top 10 Ex-Im beneficiaries received 75 percent of Ex-Im subsidies.
It is the shareholders of these few large corporations that benefit from the Ex-Im subsidies. The company could discount its prices to make up for the loss of any subsidies. Any resulting change to the company's earnings per share would be modest, Stockman says, and the difference would have "no bearing on the public interest whatsoever."
Source: David Stockman, "Why Killing The Ex-Im Bank Is Crucial To The Future Of Capitalism," Contra Corner, July 8, 2014.
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