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Agschmid

(28,749 posts)
Thu Mar 10, 2016, 12:00 AM Mar 2016

Top 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.

The Top 10 Things Everyone Should Know About the Export-Import Bank

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
41 replies = new reply since forum marked as read
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Top Ten Facts You Should Know About The Export/Import Bank... And why Ted Cruz doesn't support it. (Original Post) Agschmid Mar 2016 OP
"The export-import bank that has become little more than a fund for corporate welfare" -- PBO JonLeibowitz Mar 2016 #1
Thanks for that /nt think Mar 2016 #2
President Obama: Why America Needs The Export/Import Bank Agschmid Mar 2016 #3
Why do you suppose he changed? kristopher Mar 2016 #4
Or he realized how important the program is. Agschmid Mar 2016 #6
You believe corporate welfare is important? kristopher Mar 2016 #8
I believe American companies continuing to be competitive is important. Agschmid Mar 2016 #11
It's a transfer of risk to the public and if it weren't a subsidy, it wouldn't exist. kristopher Mar 2016 #15
Thanks, I hadn't read that since it was first published. JonLeibowitz Mar 2016 #5
He supports the ExIm Bank radical noodle Mar 2016 #37
How much taxpayer money has gone to Ex-Im Recursion Mar 2016 #7
Yeah, right. And the nuclear industry isn't subsidized either. kristopher Mar 2016 #9
So tell me how much Recursion Mar 2016 #10
None. Agschmid Mar 2016 #12
I know that, you know that Recursion Mar 2016 #13
Yup. Agschmid Mar 2016 #14
Know, the poster above understands how subsidies and... kristopher Mar 2016 #18
It sounds like you don't know what "subsidy" means Recursion Mar 2016 #19
They get their funding from Treasury. kristopher Mar 2016 #21
It *makes money* for the government; it doesn't cost the government Recursion Mar 2016 #23
It doesn't lend to exporting companies. It lends to their foreign customers. kristopher Mar 2016 #24
So students should be paying 8%+ but huge profitable corps deserve subsidized interest rates? kristopher Mar 2016 #17
No students shouldn't be paying 8%. Agschmid Mar 2016 #20
But they are paying 8%+ kristopher Mar 2016 #22
Yes they are, and it's a bank that returns money to the treasury. Agschmid Mar 2016 #25
Do you understand the risk issue involved? kristopher Mar 2016 #26
Yes I fully understand the risk. Agschmid Mar 2016 #27
The $$ amount is the fundamental metric. kristopher Mar 2016 #28
Okay how much did Boeing pay in taxes last year? Agschmid Mar 2016 #30
How much did GE pay? kristopher Mar 2016 #32
Here is an article to read which gives us some idea... Agschmid Mar 2016 #35
Kick! DesertRat Mar 2016 #16
This message was self-deleted by its author valerief Mar 2016 #29
Why would this be locked, it was brought up in he debate last night and I said that right in the OP. Agschmid Mar 2016 #31
This message was self-deleted by its author valerief Mar 2016 #33
The OP states it's about Bernie, and the democratic primary. Agschmid Mar 2016 #38
Sorry. Didn't mean to take my bad mood out on you. I apologize. valerief Mar 2016 #40
Thanks, appreciate the message. Agschmid Mar 2016 #41
It's GDP because todays meme is to equate Sanders with right-wingers n/t arcane1 Mar 2016 #34
No it's GDP because Bernie talked about this in the debate. Agschmid Mar 2016 #36
What's wrong with that when they agree? scscholar Mar 2016 #39

JonLeibowitz

(6,282 posts)
1. "The export-import bank that has become little more than a fund for corporate welfare" -- PBO
Thu Mar 10, 2016, 12:03 AM
Mar 2016

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"

kristopher

(29,798 posts)
4. Why do you suppose he changed?
Thu Mar 10, 2016, 12:16 AM
Mar 2016

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)
11. I believe American companies continuing to be competitive is important.
Thu Mar 10, 2016, 11:52 AM
Mar 2016

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)
15. It's a transfer of risk to the public and if it weren't a subsidy, it wouldn't exist.
Thu Mar 10, 2016, 08:19 PM
Mar 2016

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.

radical noodle

(7,990 posts)
37. He supports the ExIm Bank
Thu Mar 10, 2016, 10:56 PM
Mar 2016
Ex-Im has provided support to businesses and boosted exports in all fifty states, as a state-by-state analysis my administration put out yesterday shows. Over the last six years, Ex-Im supported $3 billion of exports from 134 businesses in Massachusetts. But because Congress has failed to act, the bank’s mandate is running out. That means it’ll lose the authority to finance new exports in the future. Starting Wednesday, businesses that need additional help shipping their Made-in-America products around the globe will lose that help. And that means lost sales, lost customers, and lost opportunities.

https://www.bostonglobe.com/opinion/2015/06/30/president-obama-why-america-needs-export-import-bank/tiUXVEzaUOGAWz7p1asLzM/story.html

Recursion

(56,582 posts)
7. How much taxpayer money has gone to Ex-Im
Thu Mar 10, 2016, 06:07 AM
Mar 2016

Anybody.

Anybody?

Bueller?

Oh, that's right: zero.

It's a good program.

kristopher

(29,798 posts)
9. Yeah, right. And the nuclear industry isn't subsidized either.
Thu Mar 10, 2016, 09:33 AM
Mar 2016

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.

Agschmid

(28,749 posts)
12. None.
Thu Mar 10, 2016, 11:54 AM
Mar 2016

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)
13. I know that, you know that
Thu Mar 10, 2016, 11:56 AM
Mar 2016

The poster directly above seems to think there were hidden appropriations.

kristopher

(29,798 posts)
18. Know, the poster above understands how subsidies and...
Thu Mar 10, 2016, 08:33 PM
Mar 2016

...the gimmicks that obscure the transfer of risk to the back of the public work.

Recursion

(56,582 posts)
19. It sounds like you don't know what "subsidy" means
Thu Mar 10, 2016, 08:38 PM
Mar 2016

Subsidies involve getting money. ExIm doesn't get money.

kristopher

(29,798 posts)
21. They get their funding from Treasury.
Thu Mar 10, 2016, 09:45 PM
Mar 2016

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)
23. It *makes money* for the government; it doesn't cost the government
Thu Mar 10, 2016, 09:57 PM
Mar 2016

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)
24. It doesn't lend to exporting companies. It lends to their foreign customers.
Thu Mar 10, 2016, 10:17 PM
Mar 2016

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)
22. But they are paying 8%+
Thu Mar 10, 2016, 09:48 PM
Mar 2016

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)
25. Yes they are, and it's a bank that returns money to the treasury.
Thu Mar 10, 2016, 10:35 PM
Mar 2016

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)
26. Do you understand the risk issue involved?
Thu Mar 10, 2016, 10:38 PM
Mar 2016

And what is your opinion that less than 25% goes to help the intended small size businesses' customers?

Agschmid

(28,749 posts)
27. Yes I fully understand the risk.
Thu Mar 10, 2016, 10:42 PM
Mar 2016

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)
28. The $$ amount is the fundamental metric.
Thu Mar 10, 2016, 10:44 PM
Mar 2016

The IMEX is a mostly a subsidy to large profitable corporations that pay no taxes.

Response to Agschmid (Original post)

Agschmid

(28,749 posts)
31. Why would this be locked, it was brought up in he debate last night and I said that right in the OP.
Thu Mar 10, 2016, 10:48 PM
Mar 2016
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.

Response to Agschmid (Reply #31)

Agschmid

(28,749 posts)
38. The OP states it's about Bernie, and the democratic primary.
Thu Mar 10, 2016, 10:57 PM
Mar 2016

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.

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