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Imaginary money is only valuable as long as there's force to say it is. This works pretty well within a nation's borders but when other nations would like to buy things from the U.S. but their money isn't really worth anything because all they do is grow bananas, what's a money-printing nation to do? This is where the Export-Import, EXIM, bank comes in. Banana republics can buy Boeing airplanes because the U.S. government-funded EXIM gives them the money to do so then eventually writes if off as Foreign Aid. It's actually not a bad idea, creating jobs and stimulating the economy of both countries for nothing more than a relatively small increase in the National Debt, to the tune of $20 billion per year.
Unfortunately, as always happens when Market-forces feedback is lacking, the EXIM is prone to exploitation; for example, 80% of the loans actually go to Boeing. Special Interests are also a problem; EXIM Board-members are shareholders of some of the companies benefiting; and as bizarre as it may seem, EXIM loans supplied the money for China to improve its nuclear technology. These fallacies have not gone unnoticed, and there's a lot of resistance to EXIM; in fact, politicians regularly call for its end so the funding legislation is passed surreptitiously during catastrophes, like the night of a mass shooting. The EXIM is very successful at creating lots of jobs, and is a foreign policy success, but make no mistake about it, when folks talk about Corporate Welfare, the Export-Import Bank is an example of what they mean.
By Martin Hash4.2
99 ratings
Imaginary money is only valuable as long as there's force to say it is. This works pretty well within a nation's borders but when other nations would like to buy things from the U.S. but their money isn't really worth anything because all they do is grow bananas, what's a money-printing nation to do? This is where the Export-Import, EXIM, bank comes in. Banana republics can buy Boeing airplanes because the U.S. government-funded EXIM gives them the money to do so then eventually writes if off as Foreign Aid. It's actually not a bad idea, creating jobs and stimulating the economy of both countries for nothing more than a relatively small increase in the National Debt, to the tune of $20 billion per year.
Unfortunately, as always happens when Market-forces feedback is lacking, the EXIM is prone to exploitation; for example, 80% of the loans actually go to Boeing. Special Interests are also a problem; EXIM Board-members are shareholders of some of the companies benefiting; and as bizarre as it may seem, EXIM loans supplied the money for China to improve its nuclear technology. These fallacies have not gone unnoticed, and there's a lot of resistance to EXIM; in fact, politicians regularly call for its end so the funding legislation is passed surreptitiously during catastrophes, like the night of a mass shooting. The EXIM is very successful at creating lots of jobs, and is a foreign policy success, but make no mistake about it, when folks talk about Corporate Welfare, the Export-Import Bank is an example of what they mean.