The Great Circle of Government Lending

By March 16, 2009Economy, Taxation

From AP:

WASHINGTON (AP) – President Barack Obama is announcing help today for small businesses as he and top aides seek to boost economic confidence.

The president’s planning to use cash from his stimulus package to cut fees and increase government guarantees for loans made by the Small Business Administration. The goal is to get the sand out of America’s small-business engine of job creation. Aides say the pricetag is $730 million.

From last week’s Politico:

[Small-business] owners, along with their advocates in Washington, are coming out swinging against President Barack Obama’s plan to let income tax rates for America’s wealthiest rise in 2011, saying it is an ill-timed attack on small businesses that will stymie job growth.

That’s because many small businesses pay taxes at individual rates, a dilemma that has made the small-business community into a major battlefront in the seemingly endless fight over what to do with former President George W. Bush’s signature tax cuts.

So billions of dollars in higher taxes on small business, offset by millions of dollars in subsidized loans.

Wouldn’t it be more efficient not to raise the taxes in the first place?

UPDATE (9:35 a.m.): From NBC, “First Read“:

*** Learning their lesson? What a difference a week makes. Last Monday, President Obama held just one event on stem cells and nothing on the economy. Now fast-forward a week, and it’s all about the economy on this Monday (and also about propping up Geithner again). At 11:25 am ET, President Obama and Geithner meet with small business owners and community lenders, and then Geithner delivers remarks to these folks at noon. No one can say these guys don’t listen to criticism, particularly regarding the optics on the economy. Per Bloomberg, Obama and Geithner will announce $375 million (from the economic stimulus) “to help small businesses to expand federal guarantees and lower lending fees to try to revive the flow of credit… Obama also will announce his intention to spend more than $10 billion in an effort to unlock the secondary credit market and increase bank liquidity.” Also today, at 2:00 pm, Obama speaks to employees at the Department of Veterans Affairs. Speaking of optics, the president has a late-night date with Jay Leno on Thursday when he travels to California. Just asking: when was the last time a sitting president did the “Tonight Show”? 

Leave a Reply