A Study of Government Subsidies in the Form of Business and Industry Loan Guarantees and Tax-Exempt Bond Issuances: A Project Report

摘要

The report analyzes to what extent Farmers Home Administration (FmHA) Business and Industry (B & I) Loan Guarantees combined with Industrial Revenue Bond Issues (IRB's) actually assist the Agency in accomplishing the B & I program purpose. The issues of revenue loss to the Treasury and alternative credit subsidies are beyond the scope of this report. The report begins with an introduction of the issues involved. Next, the program purpose is defined and the various target groups are identified. A discussion then follows regarding the nature of the B & I credit subsidy. The needs of the target groups are next explored. An evaluation design measuring the extent that B & I loan guarantees with IRB's reduce interest charges to borrowers is then presented. The significance of this reduced rate in terms of achieving B & I objectives is also examined. The most important conclusion is that B & I loan guarantees with IRB's do assist B & I in providing reasonable rates and terms to its borrowers.