Micro loan programs are basically a good tool. They provide funding for the poor and economically disadvantaged to start small businesses. It provides for many a first step out of poverty, using a path that can move them toward economic prosperity through free enterprise.
In many countries micro lending is being supported by non-profits and private banks. But a trend in the US is for the government to extend the reach of socialized entrepreneurship to include micro lending programs. Such is the case in a new program here in Tennessee. From the Nashville Business Journal:
Governor Phil Bredesen and Tennessee Economic and Community Development Commissioner Matthew Kisber today announced a partnership between the state and the U.S. Department of Agriculture (USDA) to launch a new Micro Loan Program for micro-enterprises, which are businesses with five or fewer employees, one of whom owns the business...."This is an excellent example of state and federal partnership that will help encourage job creation, build entrepreneurial capacity and increase revenue in rural communities across Tennessee," said Bredesen.
Wrong, Gov. Bredesen. Government meddling like this in the private markets just does not work. Loan repayments are way below private market standards, creating yet another give-a-away.
We already are dealing with the mess the corporate welfare has created. Let's not start building a system of entrepreneurial welfare!
(Thanks to Ben Cunningham for passing this along. Visit his new tax blog).
