Congressman Cleaver borrowed $1.35 million a decade ago. It was for a car wash. He got a Small Business Administration loan guarantee. If he defaults, taxpayers pick up the tab.
The venture has not worked out. He has paid Bank of America for ten years, and he still owes $1.2 million, plus $300,000 in late fees.
It looks like he is going to pull the plug? Who can blame him? So, taxpayers will foot the bill.
The Small Business Administration is a boondoggle. It backs loans on companies that do not have any track record. These are projects that a bank would not finance without a co-signer. So, the SBA co-signs, with you and me as the SBA’s co-signers.
This has gone on for decades. This is “the ownership society.” That means it’s the boondoggle and bailout society.
Blaming the Congressman is beside the point. If he had not been sucked in by the offer of a co-signer, he would not have bought the carwash. The government subsidized his bad judgment.
This is a small-scale version of crony capitalism. It wastes resource — yours and mine.