2012 Export-Import Bank Reauthorization Act of 2012

Floor Speech

By:  Ron Paul
Date: May 9, 2012
Location: Washington, DC

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Mr. PAUL. Mr. Speaker, Congress should reject H.R. 2072, the Securing American Jobs Through Exports Act of 2011, for economic, moral, and constitutional reasons. The Export-Import Bank is a prime example of corporate welfare, taking money from American taxpayers to prop up the export businesses of large corporations. Companies such as Boeing should be able to make sales based solely on the quality of their products and the willingness of the market to purchase those products. Instead, these companies rely on their political connections to subsidize their businesses. Ex-Im even provided Enron with hundreds of millions of dollars of assistance before that company's ignominious collapse. Do we really want to continue funding the Enrons of the world?

Not only is it bad economics to force working Americans, small businesses, and entrepreneurs to subsidize the exports of large corporations, it is also immoral. Redistribution from the poor and middle class to the wealthy is the most indefensible aspect of the welfare state, yet it is the most accepted form of welfare. At a time when the Federal government is running unprecedentedly large budget deficits why are we reauthorizing subsidies for large corporations? I hope that my colleagues who criticize welfare for the poor on moral and constitutional grounds will vote against this program that provides welfare for the rich.

Proponents of continued American support for Ex-Im claim that the bank ``creates jobs'' and promotes economic growth. However, this claim rests on a version of what the great economist Henry Hazlitt called the ``broken window'' fallacy. When a hoodlum throws a rock through a store window, it can be said he has contributed to the economy, as the store owner will have to spend money having the window fixed. The benefits to those who repaired the window are visible for all to see, therefore it is easy to see the broken window as economically beneficial. However, the ``benefits'' of the broken window are revealed as an illusion when one takes into account what is not seen: the businesses and workers who would have benefited had the store owner not spent money repairing a window, but rather been free to spend his money as he chose.

Similarly, the beneficiaries of Ex-Im are visible to all. What is not seen is the products that would have been built, the businesses that would have been started, and the jobs that would have been created had the funds used for Ex-Im been left in the hands of consumers. Leaving those funds in the private sector ensures that those resources will be put to the use most highly valued by individual consumers. In contrast, when the government diverts resources into the public sector via programs such as Ex-Im, their use is determined by bureaucrats and politically powerful special interests, resulting in a distorted market and a misallocation of resources. By distorting the market and preventing resources from achieving their highest valued use, Ex-Im actually costs Americans jobs and reduces America's standard of living!

Finally, Mr. Speaker, I would like to remind my colleagues that there is simply no constitutional justification for the expenditure of funds on programs such as Ex-Im. In fact, the framers of the Constitution would be horrified to know that the Federal Government was taking hard-earned money from the American people in order to benefit the politically powerful.

In conclusion, Mr. Speaker, Ex-Im distorts the market by allowing government bureaucrats to make economic decisions instead of individual consumers. Ex-Im also violates basic principles of morality, by forcing American taxpayers to subsidize the operations of wealthy companies that could easily afford to engage in international trade without government assistance. Ex-Im also violates the limitations on congressional power to take the property of individual citizens and use it to benefit powerful special interests. It is for these reasons that I strongly urge my colleagues to reject H.R. 2072.

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