President Obama has personally approved of this loan by the government-run Export-Import Bank. By law, any Import-Export Bank loan above $50 million for a communist regime must be approved by the President.
The money will be used by a telecommunications firm owned by the government.
The money must be used to by a satellite manufactured by an American firm, Lockheed Martin.
From an economic standpoint, this loan is backed by the credit of the U.S. government. It will be funded by private investors.The loan guarantee made this loan safer for investors. Therefore, it shifted the allocation of money to Lockheed Martin by way of Vietnam.
This is the problem with all Export-Import Bank loans. They place American taxpayers on the hook for loans. Then the money flows to agencies that might otherwise not have received the money. In other words, this interferes with the free market’s allocation of capital.
This has been going on since 1945. It is an aspect of modern mercantilism.
Obama used the language that every President uses: it will cost taxpayers nothing. This is economic nonsense. If it did not place taxpayers at risk — an insurance fee not paid for by borrowers — then why did a government agency make the loan? But, following his predecessors, he announced that the loan “will help American businesses create jobs here at home and sell their products around the world -— all at no cost to taxpayers,” he said in a statement.
President Clinton in 1998 put Vietnam on the list of approved nations.
My question: Why should any nation be on the list? Why does this agency even exist?
Answer: to get favored American firms into the loop of money.
Congress can comment on the loan. It cannot reverse it unless it passes a law to reverse it. Congress never does this.
In 2011, the Ex-Im Bank loaned $33 billion.