How to Stimulate the Economy, Create Jobs and Reduce Inflation
I run a small business. Nursery stock brokerage. I could use an additional $20,000 on my credit line because it looks like I will do more business if I have it. If I don’t get it I’ll be OK. Last spring my bank was begging me to take out a higher credit line. I didn’t need it. I still don’t. I paid down last years line.
Then the housing crash came. Credit crunch.
When I went to the bank to get my credit line expanded they declined. Terrified is what I would describe them as. I have decent credit. 785. Not perfect. Not horrid.
But, I’m self employed. I don’t bring home a steady paycheck. I’m seasonal. It’s worked up till now.
If you lend me money I will hire, I will buy, I will sell, I will allow others to sell, I will allow others to buy who will sell. I will add to the economic engine. Lowering the Interest rate is insignificant even if it went to zero if banks are terrified to lend money.
Lending folks to buy a house generates some jobs but is pretty temporary. Lending some babe money to spend on baubles and bangles at the bauble store in the mall (baubles that come from China does nothing for the economy). The rebate was right up there with terminal stupid.
If the folks in Washington want to fire up the economy in one easy stroke: make money for business expansion, business formation and creation available in spades.
Consumerism is far less important than economic expansion. Help people grow and expand business at the fundamental level and the rest will work.
What’s funny is in the rest of the world most economic development focuses on micro loans. But in the USA there is nearly zero emphasis on such things. We concentrate on trying to encourage behemoth corporations to grow. Oil Company Incentives, Ethanol Subsidies.
Why not find the guy who wants to risk it all to build a better mousetrap and incent him or her. Then watch things take off.
Head firmly placed well up the anal cavity policies from the Washington dopes on all sides of Every Aisle. Kerry’s proposal is silly. SBA doesn’t lend anyone any money at all.
Loosen credit for small business formation and the economy WILL recover.
