Latest / The Fiscal Policy Podcast with Fexingo: Government Budgets, Stimulus, and Public Spending
How Government Loan Guarantees Create Billion-Dollar Losses
The U.S. government guarantees over $3 trillion in loans across student lending, small business lending, and export financing. When borrowers default, taxpayers eat the loss. In this episode, Lucas and Luna examine the hidden mechanics of loan guarantee programs — how they're budgeted, why actual losses often exceed projections by 50 percent or more, and whether the political incentives to lend generously create an inevitable crisis. Using the Department of Education's $1.6 trillion student loan portfolio as the anchor case, they walk through the subsidy cost model, the problem of…
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