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It’s no secret that Washington desperately needs to cut spending. Nearly everyone agrees that national debt levels are unsustainable. The Congressional Budget Office has warned that the nation’s debt is set to jump to 106 percent of gross domestic product (GDP) in 2039. Clearly, we cannot continue down this path.
Both Republicans are Democrats are to blame for the $17.8 trillion national debt. Unfortunately, both parties have their sacred cows in the budget that they are unwilling to cut. Many Democrats say they are willing to cut military spending but won’t cut a dime of “social spending.” Many Republicans say that we need to slash the welfare state but won’t cut a dime of military spending. As a result, zero spending actually gets cut.
There should be no sacred cows when it comes to slashing government spending. There is waste in every single department that needs to go—yes, that includes the Pentagon. It’s past time to get serious about dealing with the nation’s fiscal woes.
One area where conservatives and liberals should agree to cut is corporate welfare. Often also called crony capitalism, this includes any government bailout or taxpayer funded subsidy to any corporation. Republicans tend to talk a good game against government handouts and Democrats tend to be skeptical about giving corporations more power.
Therefore, slashing corporate welfare should be a no-brainer.
A good place to start should be axing the Export-Import (Ex-Im) Bank.
Obama has even publicly criticized the bank on the campaign trial.
"We just need to cut back!" said Obama, as a presidential candidate. He pledged to end "waste at the Economic Development Agency and the Export-Import Bank that's become little more than a fund for corporate welfare."
The Ex-Im was originally started by FDR during the Great Depression. Nowadays, it’s used to fund big politically connected companies like Boeing, General Electric, and Caterpillar with taxpayer funds. By doing so, it’s an example of the government choosing winners and losers in the marketplace.
Some proponents of the Ex-Im Bank claim that it cost taxpayers no money. Don’t be fooled by these government accounting gimmicks. When the correct accounting is used, it’s been shown that the Ex-Im Bank will cost taxpayers $2 billion over the next decade.
Taxpayers shouldn’t be on the hook to subsidize exports by big corporations. Some supporters of the Ex-Im Bank often equate it with free trade. This isn’t the case because it makes it so bureaucrats and politicians dictate trade flows. A better option would be to reduce taxes and regulations to make it easier for U.S. corporations to compete internationally—without any government handouts.
This is an issue that should unite both liberals and conservative. There is no good reason that the Ex-Im Bank still exists.