Full Version: Companies with no link to attacks got 9/11 loans
The Guardian newspaper today picked up an Associated Press wire from Washington.
It's a short article, but in accordance with forum rules, here are the first 2 paragraphs:
It goes on to say that the watchdog found that up to 85% of loans weren't documented by the lenders to show eligibility for the loans.
Remember, the words "government-backed" really mean "taxpayer-funded"
Questions for debate:
Should loans found to have been "illegitimate" be foreclosed or otherwise clawed back? (Businesses got them when they weren't really entitled to, after all.)
Is this even a bad thing?
Did such loans constitute a Keynesian stimulus that prevented full-blown recession after 9-11 and the subsequent stock crash? How does this square with the professed non-interventionist free-market credentials of the Bush administration?
It's a short article, but in accordance with forum rules, here are the first 2 paragraphs:
QUOTE
Most companies interviewed about the government-backed September 11 loans they received told investigators in the US they were not hurt by the attacks and did not know they were getting terrorism assistance, an investigation has found.
Among those who received loans from the Small Business Administration, a federal agency, were a South Dakota radio station, a Virgin Islands perfume shop, a Utah dog boutique, and fast food shops.
Among those who received loans from the Small Business Administration, a federal agency, were a South Dakota radio station, a Virgin Islands perfume shop, a Utah dog boutique, and fast food shops.
It goes on to say that the watchdog found that up to 85% of loans weren't documented by the lenders to show eligibility for the loans.
Remember, the words "government-backed" really mean "taxpayer-funded"
Questions for debate:
Should loans found to have been "illegitimate" be foreclosed or otherwise clawed back? (Businesses got them when they weren't really entitled to, after all.)
Is this even a bad thing?
Did such loans constitute a Keynesian stimulus that prevented full-blown recession after 9-11 and the subsequent stock crash? How does this square with the professed non-interventionist free-market credentials of the Bush administration?
It's hard to tell exactly what went on, given this very brief article, but I thought this was interesting.
It seems that the folks giving out the money failed to do their job correctly, rather then the folks getting the money cheating the government. If what these companies are saying is correct, they didn't even know they were getting aid related to the terrorist attacks.
1. If this is true, then I would suggest that the government simply admit that they made a mistake and let the companies keep the loans. If any company knowingly applied for a loan under false pretences, of course, then the money should be returned, and the company may even have to face criminal charges.
2. Is a company getting money it didn't qualify for, with no intent to deceive, a "bad" thing? Well, only in the sense that it shows a government agency making an error that cost the taxpayers money. If we assume that the company itself didn't do anything wrong, I can't call it benefiting from the error "bad."
3. As an economic idiot, I'll refrain from much of an opinion on this question. I'll only point out that the United States does not have a true "free market." Given the immense power of large business corporations, there seems no possibility at all that it ever will. As long as Wal-Mart keeps getting tax breaks to build their Brobdingnagian stores, I won't complain about some Lilliputians picking up a few stray coins.
QUOTE
The agency's watchdog said that lenders who distributed billions of dollars in such loans failed 85% of the time to document that recipients were eligible.
It seems that the folks giving out the money failed to do their job correctly, rather then the folks getting the money cheating the government. If what these companies are saying is correct, they didn't even know they were getting aid related to the terrorist attacks.
1. If this is true, then I would suggest that the government simply admit that they made a mistake and let the companies keep the loans. If any company knowingly applied for a loan under false pretences, of course, then the money should be returned, and the company may even have to face criminal charges.
2. Is a company getting money it didn't qualify for, with no intent to deceive, a "bad" thing? Well, only in the sense that it shows a government agency making an error that cost the taxpayers money. If we assume that the company itself didn't do anything wrong, I can't call it benefiting from the error "bad."
3. As an economic idiot, I'll refrain from much of an opinion on this question. I'll only point out that the United States does not have a true "free market." Given the immense power of large business corporations, there seems no possibility at all that it ever will. As long as Wal-Mart keeps getting tax breaks to build their Brobdingnagian stores, I won't complain about some Lilliputians picking up a few stray coins.
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