In 1983, the Federal Aviation Administration landed a $47 million default on the taxpayer — $132 million in 2023 dollars — to bail out bankrupt airlines.
For this wasteful spending, Sen. William Proxmire, a Democrat from Wisconsin, gave the FAA a Golden Fleece Award in 1986. He gave awards to wasteful and nonsensical spending, eventually handing out 168 Golden Fleece Awards between 1975 and 1988.
Airlines used the FAA’s federal-guaranteed loan program to buy airplanes and parts. The program ended in 1983, when it began paying out $47 million to cover defaults.
“This sounds like ‘plane’ nonsense to me,” Proxmire quipped then. “The taxpayers should be making a flap over this loss.”
The money came straight form the U.S. Treasury, not paid by some sort of airline user fee or tax.
When airline deregulation began in 1978, removing federal control of fares, routes, and more, this FAA loan program ran into turbulence.
“Market demand, instead of bureaucratic decisions started determining which airlines would prosper,” Proxmire noted. “What had been a comfortably settled industry was thrown into turmoil. The taxpayers are paying for part of that turmoil.”
He listed nine airlines that most Americans today have never heard of all, all which had defaulted on their loans and were bailed out by the U.S. government.
“These loans have put the government in a ‘heads, they win, tails, we lose’ situation,” the senator said. “Some air carriers are going to make a bundle from deregulation. Their owners will win. What about the losers?”
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