Sen. Mike Lee will deliver a speech at The Heritage Foundation on Wednesday, April 30 at 12:30 ET to discuss how “conservative anti-cronyism reform is essential to restore a free enterprise economy of, by, and for the people.” Further details about the event and how to watch it tomorrow online available here.
Is there anything the U.S. government doesn’t take taxpayer dollars to do?
Here’s a lesser-known function of your hard-earned money: providing backing for people in other countries to buy things from America.
Come again? Yes, that’s right. Let’s say Air China wants to purchase some Boeing jets. To encourage that purchase, America’s Export-Import Bank could loan Air China the money. If Air China were to default on the loan, U.S. taxpayers would be left on the hook.
Put simply, taxpayers should not be financing this kind of “bank”—which is “little more than a fund for corporate welfare,” as candidate Barack Obama described it in 2008.
The Ex-Im Bank, as it is called, is scheduled to expire in September—giving Congress an opportunity to end this program and focus on issues that matter to Americans, like lowering taxes and reducing burdens on businesses here at home.
Sen. Mike Lee (R-Utah) recently wrote that the Ex-Im Bank primarily helps big businesses that have friends in Washington.
Most of the benefits go to large corporations that are perfectly capable of securing private financing anywhere in the world. That is to say, Congress allows Ex-Im Bank to risk taxpayer money unnecessarily to subsidize well-connected private companies.
This kind of public policy privilege, best described as “crony capitalism,” is a threat to the free market and its moral underpinnings.
It matters where the money is going, too. A look at the countries getting loans shows that they’re not all America’s biggest fans: They include Venezuela, Cuba, Russia, and China.
Ex-Im loans can subsidize purchases by foreign governments as well as businesses in their countries—and those businesses may be competing with U.S. firms. This doesn’t help the U.S. economy. Heritage expert Diane Katz explains:
Ex–Im officials assume that the economic activity they subsidize would not occur absent bank financing. That is an absurd notion, but it is prevalent among bureaucrats who cannot fathom that business actually functions without them.
American taxpayers don’t need to fund any more cronyism, much less loans to hostile nations. We don’t need the Export-Import Bank.
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