Oh look: yet another example of the government wasting our money was just brought to light.
A new OpenTheBooks report reveals that a federal agency, the Export-Import Bank, has wasted billions of tax dollars giving corporate welfare to companies in other countries, including in rival nations like China.
First, here’s the background.
What is the Export-Import Bank?
The Export-Import Bank was created in the 1930s by President Franklin Delano Roosevelt, aka FDR. (Just one of his many terrible ideas). It’s essentially a government credit agency that uses taxpayer money to give financing to support imports and exports overseas where private sector finances can’t be obtained.
One big thing it does, according to Investopedia, is “offering financing for foreign buyers to purchase U.S. exports.” Aka, give subsidies with American tax money to companies based in other nations, ostensibly so they can buy products from big American corporations.
The Export-Import Bank is essentially Uncle Sam’s corporate welfare factory. And the amount of money it’s responsible for spending is nothing to sneeze at. According to the new report, it gave out more than $201 billion between 2007 and 2021.
Where’s all this money going?
Sending Billions to Foreign Nations
Well, much of it is flowing directly overseas to foreign companies.
The US received about $26.4 billion during the measured time period, OpenTheBooks finds. The rest of the money flowed to other nations, with Mexico receiving $17.5 billion, India receiving $7.2 billion, etc., as shown in the table below.
This isn’t exactly surprising, since the point of the Export-Import Bank, after all, is to help overseas companies buy American products. But it’s nonetheless something many Americans would find objectionable—especially since a good chunk of monkey has flowed into the coffers of our rival nations.
Chinese companies, which are closely linked with the Communist-Party-controlled Chinese government, received $6.4 billion in subsidies. Meanwhile, Russia received $1.9 billion, the report notes, while billions also flowed to companies in known human rights abusing nations like Saudi Arabia and Turkey.
Is subsidizing our adversaries’ economies really the best use of taxpayer dollars?
Who Benefits, Exactly?
Maybe this would all be worth it if it truly helped American small businesses compete on the global stage, as the Export-Import Bank and its proponents claim. Yet according to OpenTheBooks, the single biggest beneficiary was Boeing, which received an astonishing $66.4 billion in support. Other top-benefitting companies include General Electric and Exxon.
Those don’t exactly sound like cash-strapped small businesses to me.
The agency claims that “small business transactions represent 90 percent of all transactions.” That might technically be true, but in dollar terms, the vast majority of the money flows to massive multinational corporations.
According to OpenTheBooks’ investigation, “Small businesses, supposedly the intended beneficiary of the Export-Import Bank, received only $54.8 billion of the over $234 billion in total assistance since 2007, or about 23%.”
The Export-Import Bank is worse than useless. It’s a scam, and another reminder that Big Government will inevitably be used to prop up and benefit the elite.
(You can read the full OpenTheBooks report here.)