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Small Business Loan Update
Mark Karavan, Knowledge Level: All Levels, Keywords: small business loan update
What is ironic is that, while the SBA has a stigma of being overly social, unnecessary, anti-capitalistic and careless, the SBA is actually much less careless than many of the AIG-affiliated organizations that were bailed out. The anticipated default rate for the loans being purchased by the government is as high at 60%; for the agency, it is only 10%. The banks holding the toxic mortgages have a 100 percent loan backing from the package, while SBA remains at a mere 75%. What is most astonishing is that the lending requirements of the SBA are significantly higher and more strict than the œfree market” counterparts in in question. So what grounds do the right have to criticize the struggling SBA?
It should be remarkably apparent from this small business loan update that the use of the term œfree market” as it has been used over the recent generation of politicians has been something of a misnomer. œFree markets” are an excellent way of disguising policies that are specifically slanted for large special interests, and at the expense of smaller businesses. Despite the recent atmosphere of free marketeering, the period of government from Reagan to George W. Bush was actually marked by quite a bit of regulation; it just happened that they took the form of tariffs, monetary deregulation, and regulations that were designed to hurt small businesses more than large ones.
The lesson here is to always be cautious of the way an ideology is being used. Popular ideologies are often democratic ones, but they are also very complex. We should always be sure to hold our politicians to making sure they carry out the ideologies they preach in a fair and just manner.
. Article on small business loan update by Mark Karavan
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