Arguing for the government: Gabe Cwern
Recently President Obama signed a $42 billion small business-lending bill into law. Although the intent of the bill was to put money into banks and local governments to help small businesses, all it will do is act as a cover for the government to say “look we are helping,” where in reality this bill will just cause more problems.
This initiative combines a small tax cut for businesses and the rest of the money is being given to small banks to distribute as loans.
However, as Rep. John Boehner said, “Unfortunately, this bill does nothing to help end the uncertainty that is crippling job creation and hurting small business. Instead it puts taxpayers on the hook for even more bailouts.”
We are setting the precedent of taxpayer bailouts to pay for the businesses that aren’t successful.
Yes, we need to help our small businesses grow but there are no guarantees the money will be going to companies who know how to use it.
Another reason why this bailout may not be as successful as hoped is the simple question of which small businesses are actually in a position to grow. In an economy like the one we find ourselves in right now, and with all the money being moved around by congress, people are still seemingly not confident in the economy and they are being remarkably frugal.
Rob Basso of “Basso on Business,” the founder of a small business community bank (like the ones receiving the money) said, “small business owners need a reason for a loan,” and in this economy where money is tight, it is fiscally irresponsible for small businesses to take up loans they can’t pay for.
In other words, what happens to a business when they take advantage of an easy to receive loan and do all the right moves, but still can’t pay it off because of the stiffness Americans have with their money right now.
This bill will not really do much of anything because small businesses themselves are not in a position to do much of anything. You must change the psyche of the American spender, and you must start evaluating the situation from the position of a small business owner. Politicians are politicking at the expense of the business, this looks like a good move but really it is likely just a motivating tool for the upcoming midterm elections.
Arguing for the opposition: Aprile Sumague
President Obama did the right thing by signing the new small business bill on Sept. 27. President Obama signed a $30 billion bill that would provide loans to small banks that will help capitalize small businesses and an additional $12 billion in tax cuts.
This bill will help provide loans and cut taxes for millions of small business owners who create most of the new jobs in this country.
Small business hiring falls off big time from January 2008 to May 2010, as reported by CNN. This new bill is aiming to create 500,000 new jobs.
It will also help new entrepreneurs as they can deduct start-up expenses up to $10,000 for 2010. Before this bill, they could only deduct up to $5,000. Business owners who buy new equipment will be able to write off the first $500,000 of their investment.
Another great thing about this law is it’s fully paid for and it won’t add to the country’s deficit.
Camden R. Fine, president and chief executive officer of the Independent Community Bankers of America, said this law will give the nation’s nearly 8,000 community banks the opportunity to further serve their local small business customers.
Small business owners had a hard time in acquiring loans when the country was first hit with the economic recession. Business owners were forced to close down their businesses.
I personally saw, and am continuously seeing, the fall of small businesses because I work for a company that sells security systems for small businesses. Many of the small businesses we cater to have been, and are still, behind on their bills.
Many of them have closed down their businesses and filed for bankruptcy. And these are businesses we need in our every day lives, such as convenient stores.
This bill will greatly help restore stability to our economy with targeted tax cuts and loan opportunities for the largest job creators in our country–small business.
Although the Senate has approved the extension of unemployment benefits, it will be better if these millions of unemployed citizens get jobs to be able to provide for themselves and their families. Unemployment barely helps with bills and necessities–people need jobs.
This new law is a way to help people in need–the small business owners and most especially, the unemployed.