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The U.S. Export-Import Bank is the poster child for the problem of special interests in politics. The 80-year-old program may seem like small potatoes compared to the massive spending projects that are bankrupting the country, but from the fevered panic of some of the country’s’ largest firms, you’d think this one Bank is the only thing propping up the American economy.
This is the inherent bias of concentrated benefits and diffuse costs that leads to the continued expansion of government—and what makes eliminating obsolete programs like the Ex-Im Bank so difficult. The Bank is estimated to cost taxpayers about $2 billion over ten years. When you divide that by the number of people in the country, it’s less than a dollar per person per year. This means there is very little incentive for the average person to devote time and effort towards defunding the program.
Contrast this with the handful of companies that receive the lion’s share of the loans Ex-Im hands out; Boeing, General Electric, and Caterpillar enjoy huge boons from the program, and are therefore willing to invest large amounts of money lobbying Congress to keep the Bank open. And since these companies have headquarters in many states and Congressional Districts, it is easy to put pressure on congressmen and senators with promises of job losses among their constituents, disingenuous as these claims might be.