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Small Business Think Tank [This Network is not currently active and cannot accept new posts] | | Topics
Commonsense Approach To The EconomyViews: 204
Feb 01, 2009 3:28 pm re: re: Commonsense Approach To The Economy

Kurt Schweitzer
"1. Have you received your check from any of the bailouts yet?"

My understanding is that many (most?) members of Congress have a moral objection to actually sending money to people they don't know personally, which is the vast majority of the U.S. citizens. I think they are afraid that they might wind up sending money to "the wrong people", however that might be defined.

Perhaps more importantly, there is a cost associated with sending out a check that is independent of the dollar amount printed on the check. Sending money to 300 large corporations and trusting them to "redistribute the wealth" is a million times cheaper than sending the same money to 300,000,000 citizens.

Besides, a $3 billion check is more newsworthy than 300 million $10 checks.

(I think this same reasoning is why the Small Business Administration defines a "small business" as one that employs 500 or fewer workers - so that they can "help small business" by helping the small percentage of businesses that are than large.)

"2. Are you able to borrow more easily today than you were six months ago before all of these bailouts began?"

Please note that sending out checks as described in #1 would do nothing to the credit markets. The only thing that will make credit easier to obtain is the confidence of the risk-averse people and corporations who actually lend money to others. They want to KNOW that they will get their money back, and make a profit. They are very gun-shy right now since their latest creation for guaranteeing profits from their investments has blown up in their faces.

"3. Are you less worried about your future now than you were before the bailouts began?"

I'm a small business owner - I doubt my perceptions of the future match those of "Joe Sixpack", and mine are less colored by the economy in general than by when I think the snow will finally melt.

"4. If the government asked you if you would feel better about your economic situation by keeping $6700 for your family, or sending it to the government and asking them to spend it however they would like, which one would make you feel better?"

This is a non-question. Of course EVERYBODY would like to keep every penny they earn and not have to send ANY of it to the government. But somewhere we have to develop a balance between the individual good and the collective good.

If each individual got that $6,700, what would happen? How would it be spent? How would that spending impact the economy? What jobs would be created? How long would those jobs last?

Worse, suppose everyone got a $6,700 tax break. That would be an extra $128 in your paycheck every week, or more likely a reduction of your taxes by $6,700 next year. How would that help things?

Have you started seeing Tax Refund Sales in your area yet? The major companies around here used to pay out bonuses to all workers every year, in March, that powered "Bonus Sales" every year. Great for the restaurants and boat and car sellers, pretty much invisible to everyone else. This is what I think the $6,700 tax break might do.

I'm glad this Congressman has some criteria for evaluating how he should vote on a bill. I just wish they were a little less parochial.

Kurt Schweitzer
Urban Village Scooters

Private Reply to Kurt Schweitzer (new win)

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