The Astonishing Amount of Taxpayer-Financed Loans That Have Gone to Failed Businesses
If a private bank had to write off $17.5 billion worth of bad loans, it would almost certainly go out of business, but not the Small Business Administration. It can just ask Congress for more money when it incurs big loan losses.
That’s why many of the loans the Small Business Administration has made seem completely irrational. According to Adam Andrzejewski, CEO of Open the Books:
- “SBA bankers didn’t even have the foresight to see the coming digital electronic revolution” and lent $412 million to paper and printing businesses.
- “The SBA put $25 million into travel agencies and reservation firms while the whole world moved online to Orbitz and Priceline.”
- From 2002 to 2008, the SBA lent $60 million to video cassette tape businesses and $3.8 million to three Blockbuster Video stores.