OpenTheBooks.com founder Adam Andrzejewski has just released a report exposing how the Small Business Administration (SBA) has been making loans in support of a lifestyle better suited to the dreaded "1 percent" than helping regular “Americans start, build and grow businesses.”
Over the past seven years, more than $67.23 billion in Federal Transfer™ SBA loans and guarantees were awarded to nearly 35,000 entities—all with a $1 million minimum amount. Some of Andrzejewski ‘s findings include:
Amongst the $1 million SBA Wealthy Lifestyle loan recipients are exclusive Rolex and other up-scale, affluent jewelers; Lamborghini and other luxury auto dealers; aesthetic enhancement and plastic surgery clinics; helicopter tour companies, BMW motorcycle dealers; wineries- including those in Napa Valley and Sonoma, CA; lodges and resorts in Jackson Hole, Cape Cod, Palm Beach, Lake Tahoe and across America; high-end private clubs for yachting, skiing, shooting, surfing, smoking cigars, and members-only country clubs; injury lawyers; artistic dental firms; venture capital, mezzanine finance & private investment pools; specialty companies including luxury pet resorts, golf courses, marinas & more!
Just weeks ago this administration was lecturing us about “economic patriotism,” not to mention years’ worth of “you didn’t build that” foolishness. Stephen Moore helps put Andrzejewski ‘s findings into a larger context in a recent Investor’s Business Daily article:
Critics of the SBA ask why a select few of the millions of startup businesses in America should receive subsidized loans.
After all, Sen. Tom Coburn of Oklahoma has noted in his annual federal waste report that "less than 1% of entrepreneurial startups ever receive any help from SBA." The other 99% find funding from savings, friends, family, local banks and venture capitalists.
The SBA has come under attack for gross misallocation of funds and even potential fraud. A 2008 inspector general report found 1-in-4 SBA loans involved improper payments. …
The businesses that benefit from the low-cost lending often aren't small at all.
This sort of thing is nothing more than redistributing wealth from average Americans to already-wealthy Americans–a clasic reverse Robin Hood scheme. Small businesses are the backbone of our country. Hopefully, over time and with hard work—not by bilking taxpayers—those businesses grow into larger ones.
Rather than letting the SBA continue running amok, defund it and return the money to taxpayers.
After all, the ones who actually earn the money are best situated to calculate the risks and returns on their investments. We don't work as hard as we do to have our tax dollars handed over through government to those who've made their fortunes the old-fashioned way but seek to increase those fortunes by gaming the system at our expense. That's not free market. That's freeloading.