The efficiency of big government - Small Business Administration

From The Daily Signal:

The Astonishing Amount of Taxpayer-Financed Loans That Have Gone to Failed Businesses
Small businesses are America’s backbone. They employ more than half of America’s workforce, and for every large business (more than 500 employees), there are 1,500 small ones.

Most small business owners—those who risked their own money to start their business—would be shocked to hear that the government’s Small Business Administration has written off $17.5 billion dollars of taxpayer-financed loans and loan guarantees to 160,000 failed businesses since 2000.

Some examples:

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.

Moreover, many of the Small Business Administration’s loans don’t represent the small-scale, mom-and-pop loans the administration claims to support. According to the Open the Books report:

• • Significant loans went to upscale operations, including: Beverly Hills diamond suppliers, Lamborghini dealerships, private country clubs, luxury limousine companies, and ritzy destination resorts.
  • Many large corporations also got in on taxpayer dollars through their franchises. Some of the SBA’s significant loan defaults include: Choice Hotels, Holiday Inn, Comfort Inn, Days Inn, Quiznos, and Cold Stone Creamery.

While there’s nothing wrong with upscale businesses or well-known franchises, it’s hard to believe these businesses couldn’t obtain loans from the private sector, without taxpayer subsidies.

The people at the SBA who write these loans have zero accountability - they just have to follow the guidelines and if the business fails, it is no skin off their noses. They just keep drawing the government paycheck and benefits. If they really screw up to the point where it hits the newspapers, they will be publicly castigated and quietly moved to some other department often with a raise for their troubles.