If you want to understand why the economic recovery has been so anemic, look at America’s trade deficit. It’s so huge it shaved a full percentage point off economic growth last year, and the impact was even greater during the first quarter of this year. The biggest single reason for the deficit is trade with China, because that country sells about a billion dollars more in goods to the U.S. each day than it buys. The larger problem, though, is that Beijing is giving its exporters hundreds of billions of dollars in export financing each year to drive U.S. companies out of foreign markets — at the same time Congress is debating whether to abolish America’s only export credit agency, known as the Export-Import Bank. Opposition to reauthorizing Ex-Im is hard to fathom, given that it doesn’t cost taxpayers a cent, helps private lenders to finance deals, and conducts the vast majority of its transactions on behalf of small businesses. The fact that some legislators want to kill it off shows how out of touch they are with current economic realities. I have written a commentary for Forbes here.
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