Comments on: New House majority leader, a commercial space supporter, opposes a tool that supports commercial space

By: Andrew Swallow

Andrew Swallow — Sun, 29 Jun 2014 22:59:26 +0000

So the miners are subsidising the export of aircraft. I doubt anyone asked them.

Wiki on subsidies.
https://en.wikipedia.org/wiki/Subsidy

Talk to the Mediterranean countries about both the EU and USA cancelling export subsidies. They may be able to think of better uses for the money.

By: Dick Eagleson

Dick Eagleson — Sat, 28 Jun 2014 02:17:32 +0000

This is probably the best time there is likely to be to kill off Ex-Im. Market interest rates are already about as low as they’re ever likely to get so the spread between Ex-Im and market rates is also about as slim as it’s ever likely to get. Also, as NewSpace companies like SpaceX take more business away from U.S. dinosaurs like Boeing and LockMart, and Old World dinosaurs like Arianespace, no additional inducement will be needed for foreigners to avail themselves of U.S.-based launch services other than the unbeatably low prices. This seems like a good time to step off the “I’m willing to bleed my taxpayers more than you are willing to bleed yours to make a sale” bandwagon. Even with Eurozone subsidies, the A350 doesn’t look to be doing too well as the recent huge order cancellation by Emirates Airlines shows.

Europeans are our main competitors in this financial pissing contest. Given that they have a sagging currency to save and a lot of other financial overcommitments to service they might well be grateful for an excuse to wind down their own subsidy bill. And, if not, the best way to break them of bad financial habits is to let new entrants into fusty, dusty industries break them financially by coming up with products and services so cheap continuing to subsidize the traditional players becomes unsupportable. We have that sort of dynamic economy – or at least we will again once the current Saboteur-in-Chief leaves office – the Europeans don’t.

By: Donald F. Robertson

Donald F. Robertson — Thu, 26 Jun 2014 17:13:29 +0000

Andrew: The country makes a loss on every sale.

While I have no way to prove it with finite research, I think this exceedingly unlikely. Boeing makes a lot more on the sale of each 787, and the company, its domestic suppliers, and its and their employees pay a lot more in taxes, than the forgone interest payments cost the economy.

If you prove me wrong, I might change my opinion, but I do think I’m safe. . . .

— Donald

By: Andrew Swallow

Andrew Swallow — Thu, 26 Jun 2014 08:15:16 +0000

The charity is not in US Ex-Im Bank making loans but in making the repayments too small. The USA is basically bribing foreigners to take the goods away. The country makes a loss on every sale.

Charge the buyers an interest rate based on their credit risk. If they choose to be naughty boys then they have to pay more.

By: Donald F. Robertson

Donald F. Robertson — Wed, 25 Jun 2014 23:29:28 +0000

The pressure to shut down ExIm comes from domestic airlines, who argue that low interest loans to foreign carriers to buy the latest 787s is unfair to domestic airlines who must arrange, and pay for, their own loans. Then, the Tea Party jumped on the bandwagon. The airlines have a point.

However, the United States has to decide if we are going to be strictly a service economy, or do we want to actually produce products that the rest of the world wants or needs to buy and actually fund our standard of living. It’s too bad for the domestic airlines, but I vote for the latter. Also, ExIm funds loans to a lot more exporters than just those of the aerospace industry (not least, communications satellites and SpaceX) and if the airlines succeed, they will hurt an awful lot of American jobs that are dependent on matching foreign export subsidies.

— Donald

By: Rhyolite

Rhyolite — Wed, 25 Jun 2014 23:05:30 +0000

This is idiotic. As far as I can tell, Ex-Im does good work. For the party of farm subsidies to cite “free market values” is something that belongs in an Onion article. The only questions is which lobbyists paid them off to kill Ex-Im and will they get a higher price from the Ex-Im supporters.

By: Rhyolite

Rhyolite — Wed, 25 Jun 2014 23:01:36 +0000

“NASA should be a branch of the military.”

If NASA were made a branch of the military, the Pentagon would zero out its budget request every year. No war fighting value.

By: Donald F. Robertson

Donald F. Robertson — Wed, 25 Jun 2014 18:06:39 +0000

Almightywind: If [the] government needs a worldwide cell phone network, they should procure one

Now, there’s a socialist argument if I’ve ever heard one. The answer is simple: why pay to design, develop, and deply a hugely expensive network from scratch when, for a modest subsidy (not of cash, only an interest guarantee), you can get someone else to fund it, and do all the hard work, for you?

— Donald

By: amightywind

amightywind — Wed, 25 Jun 2014 11:14:09 +0000

Iridium Next, like Iridium, lacks merit according to the free market, If they government needs a worldwide cell phone network, they should procure one.

By: Fred Willett

Fred Willett — Wed, 25 Jun 2014 09:00:18 +0000

Privatization of ExIm is not an option. The ExIm gives low interest loans to support and facilitate Exports and Imports of US products in competition with similar Export Import banks in other countries that support their local industries.
If such a bank were privatized it would not be able to provide low interest loans but would have to provide market rate loans like any other Trading Bank. Severely undercutting US business’ ability to compete.
In theory the Republicans are right. ExIm distorts the market and is a bad thing. In practice abolishing it would seriously harm US business making it less competative on the world stage.