Abandoning Unpaid Loans Another Sign Of Government’s Irresponsibility
We have editorialized repeatedly — and will continue to editorialize, likely repeatedly — that our federal government needs to take spending deficits and the $33 trillion national debt seriously.
A recently revealed failure by the Small Business Administration and the White House indicates the executive branch certainly needs frequent reminded that this sort of growing debt is a looming crisis.
The SBA has decided not to try to recover defaulted Economic Injury Disaster loans — the type of loan used to assist businesses that struggled during the heights of the COVID-19 pandemic — when the loan was for less than $100,000.
As things often and potentially catastrophically do in Washington, D.C., those figures add up.
According to the agency’s inspector general, as reported by Reason magazine, the loans the agency has decided to give up recuperating total between $60 billion and $70 billion.
“It’s completely unacceptable that SBA is leaving taxpayers on the hook for $62 billion in EIDL loans,” U.S. Sen. Joni Ernst, R-Iowa, said, according to Reason’s report.
She’s right. As the analysis by the SBA’s inspector general shows, the loans were made irresponsibly, with applications not being subjected to the Treasury Department’s “Do Not Pay” database – a list of known criminals and scammers — until years too late. The agency’s own efforts to safeguard against fraud were disjointed and ineffectual.
The irresponsible management of the loans will only be compounded by irresponsibly walking away as up to $70 billion remains uncollected and unreturned to U.S. coffers.
Moreover, it raises the question: Should any American taxpayer, reflecting on an executive branch irresponsibly lending money under one administration and one party, then irresponsibly refusing to even attempt to collect the owed money under another administration and the other party, believe our federal government, as a whole, is up to the task of treating the $33 trillion deficit with any sense of responsibility?