In his second term, President Reagan supported an effort by his budget director, David Stockman, to abolish the Small Business Administration. Stockman referred to the SBA as a “billion-dollar waste” that benefited few small businesses, while distorting credit markets. SBA advocates always argue that the agency is very economical. With the exception of the last few years, budget requests for the SBA have been consistently lower than $1 billion.

Yet budget requests don’t tell you much about the final cost of a program. First, based on SBA data, taxpayers are already on the hook for more than $90 billion in outstanding loans guaranteed. As the years go by, taxpayers’ exposure increases.