From The CATO Institute:
Budget & Taxation
Terminating the Small Business Administration
by Veronique de Rugy, Tad DeHaven
Cato Institute
August 11, 2011
The primary purpose of the Small Business Administration (SBA) is to encourage lending to small businesses through government loan guarantees. The SBA retains political support because it is a tool for policymakers to signal their support of small businesses. At the same time, SBA supporters have cultivated a myth that being against the agency is equivalent to being against small businesses. In reality, the great majority of American small businesses have thrived without government subsidies. Even though there are no substantial economic benefits of the SBA, the agency has remained politically entrenched. It gains particularly powerful support from the banking industry. However, with today’s huge federal deficits, policymakers should begin eliminating unneeded business subsidies in the budget, including SBA spending.
Budget & Taxation
Terminating the Small Business Administration
by Veronique de Rugy, Tad DeHaven
Cato Institute
August 11, 2011
The primary purpose of the Small Business Administration (SBA) is to encourage lending to small businesses through government loan guarantees. The SBA retains political support because it is a tool for policymakers to signal their support of small businesses. At the same time, SBA supporters have cultivated a myth that being against the agency is equivalent to being against small businesses. In reality, the great majority of American small businesses have thrived without government subsidies. Even though there are no substantial economic benefits of the SBA, the agency has remained politically entrenched. It gains particularly powerful support from the banking industry. However, with today’s huge federal deficits, policymakers should begin eliminating unneeded business subsidies in the budget, including SBA spending.
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