American Forum

AMERICAN FORUM

By Michael Mariotte

Imagine for a moment that you want to build a house and need a loan. Your financial track record is shaky: Last time you tried to build a home you went over budget by 800 percent and the project took years to complete. Based on past performance, the odds are about 50-50 or better that you’ll default on this loan.

Adding to your problems is the fact that nobody’s ever built a big, complicated house like this one. Engineers have identified serious safety flaws in design that must be corrected before plans are approved. It’s anybody’s guess how much those changes will add to the price tag. Even without the mandated safety changes, costs have increased.

Forget about getting your loan from a bank. No private lender would touch this. Indeed, Wall Street calls this type of project a “bet-the-farm” investment, so risky it could be a “corporate killer.” Where do you turn? The U.S. taxpayer, of course.