Hidden Spending: The Politics of Federal Credit Programs by Dennis S. Ippolito

Author:Dennis S. Ippolito [Ippolito, Dennis S.]
Language: eng
Format: epub
Tags: Public Policy, Political Science, General
ISBN: 9781469640037
Google: 2us2DwAAQBAJ
Goodreads: 10614855
Publisher: UNC Press Books
Published: 1984-10-15T00:00:00+00:00

Bailouts as Policy

The Lockheed, New York City, and Chrysler credit assistance programs are conspicuous because they are large, single-borrower cases. They illustrate, however, the almost complete absence of a coherent federal credit policy, an absence that is even more striking when the less conspicuous covert bailouts are examined. For Lockheed, New York City, and Chrysler, it is highly unlikely that direct aid, in the form of grants or explicit subsidies, could have been approved. Loan guarantees, however, were treated as cost-free and were therefore a feasible alternative.

The perception that loan guarantees entailed no cost was reinforced by the absence of any fiscal tradeoffs. Without comprehensive credit controls, guarantees and even direct loans could be handled on a piecemeal basis. And with guarantees, there was no problem with the spending ceilings in congressional budget resolutions. Absent even these minimal constraints, it should not be surprising that short-term political considerations dwarfed the long-term economic ones.

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