Easy Terms

If you owe the U.S., why pay?

"We must make it clear that debts owed to the Federal Government must be repaid. It is not right that responsible, honest citizens should suffer because of those who do not honor their obligations." So said President Reagan last year, announcing a Government crackdown on its debtors. One obvious place to start: the Small Business Administration, where more than 10% of 150,000 loans are currently overdue. As it turns out, one of the SBA'S heftier overdue loans belongs to Gerald P. Carmen, 51, head of the General Services Administration. Carmen, who has been complaining about a lack of recognition for his cost-cutting operations in the GSA, owes the Government $405,000 plus $30,000 back interest and has not made his monthly $2,700 loan payment in almost a year.

Carmen signed for the 30-year, $425,000 loan at 6.5% interest in 1975 when an urban renewal project forced him to relocate his auto-and-tire service business (sold in 1979) in Manchester, N.H. Since July 1981, he has received two six-month deferments on his monthly payments. Carmen, who earns $59,500 a year, insists such deferments are available "to any American citizen."

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