This is the Cato Daily Podcast for Friday, June 20th, 2014.

I'm Caleb Brown.

The Export Import Banks supplants private sector activity.

It actively subsidizes mostly massive profitable U.S. companies and it often facilitates harm to

downstream US companies. So ending that bank would seem to be an easy litmus

test for a GOP that desperately needs credibility on restraint of spending.

Dan Eekinson, director of trade policy studies at the Cato Institute, makes the case for ending the Export-Import Bank.

So in order to facilitate for ending the Export Import Bank.

So in order to facilitate international trade, U.S. companies need to find credit-worthy companies

to buy their products products and often that requires

financing, export financing. For some reason since 1934 the United States

has had the Export Import Bank, which is designed to provide financing for

foreign companies to buy U.S. products.

The reason is that when a U.S. company sells abroad and has to go 30, 60, 90 days without getting any payment.

There's, that produces an impediment to trade.

So there is clearly a need for financing these sales so that U.S. exporters get money up front or sooner.

But there's absolutely no reason the private sector can't be serving this demand.

So XM has made it, has turned into sort of a subsidy for big U.S. companies by providing low-rate

financing, below-market financing to foreign purchasers, or providing

financing in cases that the market might deem too risky.

So they're either putting taxpayer dollars at risk in those cases or they are

musling in on private sector territory, banks that could be financing these operations.

...