Small business: Government is the problem

Why is the government tone deaf when it comes to business and the economy? Perhaps it’s because the vast majority of our ruling elite class has never done a productive thing in their entire lives. They don’t have a clue as to what it takes to run a lemonade stand, much less a real business. Perhaps that our dear comrade leader excluded business leaders and invited union leaders to his “jobs summit” is also an indication of his unwillingness to listen to the creators of jobs. I think it’s all of the above – and more. (story here)

Congress is focusing on a health care bill that features crippling taxes and mandates for small firms, fully expecting to have it in place and implemented (10 years of taxes, seven years of “reform”) this year with unemployment at 10 percent and expected by many to rise. Lawmakers also allowed the minimum wage to rise by nearly 11 percent in July 2009, catapulting teen job loss to over 500,000 and an unemployment rate of 27 percent in the second half even though the economy started growing. This was double the loss in the first half when GDP growth was plummeting. If the administration wants to count “jobs created and saved” it should also be accountable for “jobs destroyed or prevented.

On top of all that bad news, small business owners fear Washington will then feel the need to “stimulate” us with even more spending and larger government (and taxes), the death knell for private sector vitality…The loss of a lock on 60 Senate votes for the Democrats may be encouraging to some owners, but the President and Congressional leaders still sound like they plan to press on with their agenda, not good news for small business owners.

Let’s apply some logic by looking at a typical example. Say you own a small company that makes doohickies. You used to employ 100 people but declining sales forced you to lay off 20% of your workforce. People just aren’t buying your doohickies or they’re waiting longer to replace them so your sales (income, profits) are down. Now you make enough to meet demand with less people – you’re just getting by. Along comes the government offering a $5,000 incentive to hire people – such a deal! But it costs you say, $40,000 for just one new hire, and you don’t really need new employees because you don’t sell enough doohickies to support more employees. So, do you hire more employees because of the government incentive? Only if you’re an idiot.

Now let’s look down the road a little. The government is trying to pass obamacare which will drive up insurance costs and impose costly regulations on your business. They’re also talking about Cap & Tax, with more regulations and higher costs. The economy doesn’t look much better (even though the government says it is) so you’re unsure if sales will pick up. What do you do? Do you hire more employees to meet an anticipated demand? Again, only if you’re an idiot.

It doesn’t take a genius to figure this stuff out so why can’t the “geniuses” in government wrap their heads around it?

Alas, Washington doesn’t appear to be listening to what small businesses and the American people are saying they want: less taxes, spending, and regulations. Instead, in a vain effort to end a recession that government policies helped foster, policymakers continue to throw trillions of taxpayer dollars off the wall in the hopes that something sticks.



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