We hear much talk in the media and government today regarding businesses that are too big to fail. It is no doubt that when a big business fails, many feel the economic affect. However, what about the thousands of small businesses in the economy? Each of these businesses may be small but when looked at as a whole they represent a large percentage of the nation’s workforce and are the greatest producers of new jobs.
Politicians are motivated to stimulate large corporations because they can gain political capital for re-election by being able to tell their constituents they saved thousands of jobs. These companies may also be large contributors to these politicians campaigns making it difficult for these politicians to vote against bills that may benefit these companies. This is why they vote for economic stimulus bills that favor giving money to big businesses. However, someone must pay the price for these bailouts. This burden usually falls upon small businesses and individuals. This is usually through higher taxes higher fees or printing or creating money to pay for the program. Should the government choose to simply print up more money, they will create inflation down the road. Burdening small businesses and individuals with higher prices for what they need.
The question we must ask is how does the government print up or create more money. They used to do this by simply printing more money but today this is come by borrowing money through the sale of treasury bills. A large majority of this investment capital comes from foreign countries so it represents new money coming into the country. The law of supply and demand tells us that when the supply of an item goes up its price or value goes down. This influx of new capital into the economy causes the value of the dollars we have to go down. In other words, your dollars will buy less. Whether the bailouts contained in the current stimulus financed with higher taxes or higher prices, small businesses and individuals will feel the crunch.
All businesses in America were once small businesses. It is unconscionable to forget these heroes of our economy by squeezing them out of business. What we need is a stimulus package that will give these small businesses and individuals the freedom to once again become creative and create new jobs. The only way to accomplish this is to adopt a stimulus package involving government retraction instead of government intervention. Stimulation through government retraction involves cutting taxes instead of raising them. This will increase available capital that small business and individuals will invest in either their own business or other businesses making it possible for these businesses to expand and produce more jobs.
The economic stimulus package of more government spending has passed the House of Representatives and now goes on to the Senate. I urge each of you to write your senator and urge them to vote no on the pending stimulus program. Tell them that in its present form it fails to stimulate the largest sector of economic growth in our economy, small businesses. Unless the congress and senate can come up with a stimulus package of government retraction that will jump-start the economy by encouraging both small and large businesses in our nation to expand leading to new job creation, no real economic stimulation will occur. What we need now is less government not more.
Post your comments at this blog or contact me at dalewsr34@gmail.com.
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