2016 Postmortem
Related: About this forumTop Ten Facts You Should Know About The Export/Import Bank... And why Ted Cruz doesn't support it.
This came up in the debate tonight several times it appears Senator Sanders is also against it, I DO NOT agree with this and DO NOT support him here.
Recently, Republican Senator Ted Cruz and his colleagues on the far right called their successful efforts to block renewal of the charter of the U.S. Export-Import Bank an "important victory." Unfortunately, their "victory" may cost many Americans their jobs. It may cause small businesses to go under. It may cost thousands of American exporters, large and small, a vital competitive edge. Calling this a "victory" requires some pretty remarkable mental gymnastics. Most who follow the issue, business and labor, Democrats and even some Republicans, are viewing this as a serious, self-inflicted economic wound.
The U.S. Export-Import Bank, otherwise known as the Ex-Im, was created to help level the playing field for American exporters and to help U.S. businesses get financial services such as loans and credit guarantees that they needed in situations when private banks wouldn't or couldn't be of help. The regular renewal of Ex-Im's charter has been a non-issue for 81 years and Congress has renewed its charter 16 times under Republican and Democratic administrations alike. But exterminating the Ex-Im has become the "be-all and end-all" for the extreme right wing of the Republican Party.
The far right has gained a disproportionate amount of power in the Republican Party these days. And their cherished "victory" in pursuit of imposing an ideological purity on our economic policy is going to have real world consequences for many American workers and small businesses.
So, to help you sort it all out, here are the top 10 facts you should know about the Ex-Im Bank: http://m.huffpost.com/us/entry/the-top-10-things-everyon_b_7859826.html
JonLeibowitz
(6,282 posts)source:
Clinton told me tonight I shouldn't disagree with or criticize our prior Democratic presidents.
ETA: Also: "I'm not a democrat who believes we should defend every government program just because it's there"
think
(11,641 posts)Agschmid
(28,749 posts)kristopher
(29,798 posts)Could it be the same reason he took single payer off the table before the health care debate even started?
Once you're confronted with and coopted by the money machine, your options become severely constrained.
Agschmid
(28,749 posts)kristopher
(29,798 posts)Agschmid
(28,749 posts)Also it's not really welfare, the bank is self supporting and returns money to the treasury typically.
I wouldn't call that welfare.
kristopher
(29,798 posts)Risk, in lending, equals money.
It's a subsidy. This isn't really a debatable point, it's a fact by all normal economic accounting. The desirability of the subsidy can be legitimately debated, but the existence and the value of below market financing isn't. Nor is the fact that such a program is a subsidy. Which, BTW, makes a mockery of the claim you made about "American companies continuing to be competitive".
ETA: It is also my understanding that the accounting mandates set by Congress are designed to obscure the amount of the subsidy.
JonLeibowitz
(6,282 posts)radical noodle
(7,990 posts)https://www.bostonglobe.com/opinion/2015/06/30/president-obama-why-america-needs-export-import-bank/tiUXVEzaUOGAWz7p1asLzM/story.html
Recursion
(56,582 posts)Anybody.
Anybody?
Bueller?
Oh, that's right: zero.
It's a good program.
kristopher
(29,798 posts)Wait, that's only able to be said because through Congressional accounting gimmickry it's cost to taxpayers isn't calculated properly.
I wouldn't mind if the below-market-cost money were being directed 100% to small business, but underwriting the cost of risk for the mega-corps that already are dodging taxes?
Nope.
Recursion
(56,582 posts)Give me a number. How much money went to Ex-Im?
Agschmid
(28,749 posts)Zip, zilch, zero.
International trade is going to happen with or without us, having advantages to make it easier to sell American products should not be gone in the future.
Recursion
(56,582 posts)The poster directly above seems to think there were hidden appropriations.
I'm just kicking the thread .
kristopher
(29,798 posts)...the gimmicks that obscure the transfer of risk to the back of the public work.
Recursion
(56,582 posts)Subsidies involve getting money. ExIm doesn't get money.
kristopher
(29,798 posts)Interest on a loan is "money". Subsidized interest rates are subsidies.
So the fundamental question goes to what is the function of the IMEX bank if it isn't to provide preferred financing?
You are hanging your hat on the low default rate and the fact that they haven't YET experienced a period of massive losses. However, if that possibility wasn't a real part of the equation, there would be absolutely no rationale for the bank's existence. The normal bank rating system would be adequate.
Recursion
(56,582 posts)If you can't even tell the difference, it's hard to take you seriously.
Just like FDIC, it gets no money from the Treasury. You're simply wrong (or lying) about that.
Its operating costs come from its own generated profits. It borrows money from the Federal Reserve (you may be confusing the Fed with the Treasury?) and lends that money out to exporting US corporations.
kristopher
(29,798 posts)The money they return to the Fed is the below market interest earned on the subsidized loans the foreign customers of some of the largest US corporations (eg GE).
This means that companies like GE and Boeing are increasing their bottom line in direct proportion to the amount of the subsidized discount.
It is a subsidy to the corporations that is hidden behind the assumption of risk by the taxpayer.
It is exactly like risk transfer treatment the nuclear industry receives here. If they had to pay the actual market rate for the risk they pose, they would not be able to operate. The $100B+ aftermath of Fukushima is a glimpse of the type of liability that industry is transferring to the public here.
Similar exposure is embodied in the loans to foreign entities by the IMEX. IF the risk premium were not being avoided and the situation is not as described, then explain specifically what advantage is afforded by IMEX to the buyers and sellers that would not be present in normal commercial financing?
kristopher
(29,798 posts)Agschmid
(28,749 posts)kristopher
(29,798 posts)The foreign customers of IMEX aren't though. They are getting loans that are deeply discounted against the risk incurred in making the loans.
Agschmid
(28,749 posts)But I agree students should not have to pay such high %'s.
And I also think the Ex/Im bank is a good thing... They aren't really related, you want those students to have jobs once they graduate right?
kristopher
(29,798 posts)And what is your opinion that less than 25% goes to help the intended small size businesses' customers?
Agschmid
(28,749 posts)And a much higher % of total loans help small businesses, but when you look at it as total $$$ amount loaned the smaller business don't make up as much (they are small businesses after all).
The Ex/Im bank is good for America and our economy and allows us to compete in a global marketplace, Bernie's position on this is wrong IMO.
kristopher
(29,798 posts)The IMEX is a mostly a subsidy to large profitable corporations that pay no taxes.
Agschmid
(28,749 posts)kristopher
(29,798 posts)Agschmid
(28,749 posts)But they don't break the taxes out by country (most multi nationals don't).
http://www.forbes.com/2011/04/13/ge-exxon-walmart-apple-business-washington-corporate-taxes.html
DesertRat
(27,995 posts)Response to Agschmid (Original post)
valerief This message was self-deleted by its author.
Agschmid
(28,749 posts)Response to Agschmid (Reply #31)
valerief This message was self-deleted by its author.
Agschmid
(28,749 posts)It was posted right after it was mentioned by Bernie in the debate.
This is about the primary, and it's one of the reasons I don't support Bernie. Just because I say "Ted Cruz" doesn't make it against the SOP.
valerief
(53,235 posts)Agschmid
(28,749 posts)arcane1
(38,613 posts)Agschmid
(28,749 posts)scscholar
(2,902 posts)Well?