3 Responses to “Small Business Debt Relief”

1. Poohcat1 says:

   July 3, 2009 at 4:22 am

   Tax breaks, rebates, tax relief, are we asking the right question?
   Any way you look at it, tax breaks, rebates and tax relief are all handouts to someone. If you give a 3% tax break to corporations and the wealthy, it is a handout that they didn’t have before. If you give a tax break, rebate or tax relief to the tax paying middle class, it is a handout they did not have before. If you give a check to those that do not pay taxes and call it tax relief, it is still a handout.
   I reckon that the question we have to address is which option (if any) is best for America, American jobs and therefore the American people as a whole.
   We saw the lack of results when the stimulus package was handed out last June and July. The money in 98% of the households went to pay down debt or to pay every day living expenses. Statistics show us that very small of it went to the retail markets and an even smaller amount went to savings. Did this bring an increase in jobs? Obviously not! Our jobless rate is higher now than it was then. So can we honestly believe that giving tax relief or tax cuts or rebates again to the middle class and the poor are going to result in an overall improvement in the nation’s economy?
   During the years of “Reganomics” (trickle down economics), the United States saw unprecedented growth in jobs and general strength and vigor in the stock markets. No tax relief or handouts were given to the middle class….yet the overall state of middle class Americans improved substantially as jobs became simpler to get and new innovations and inventions generally made our lives simpler. It stands to reason then that providing incentives to large and small businesses alike…rather than to individuals is much more likely to make jobs ..thus a better economy for all of us.
   The problem as I see it with Sen. Obama’s tax policy is that he is COUNTING on the American people who receive this tax relief to somehow join together to help build a better American economy for all. Our experience with the stimulus package has already shown us that this is not likely to happen.
   The problem with McCain’s tax policy is that he is COUNTING on the goodness of the corporations and the rich to use the tax breaks to make new jobs. Frankly, without specific requirements that must be met by those corporations and the largest of the so called small business sector, this is not guaranteed to help either.
   My proposal is to keep in place the tax levels currently given to large corporations, but insist that they meet specific requirements to remain at that level. Requirements such as, No jobs being outsourced to other countries and those already outsourced must be brought back to America and to American workers. Another requirement would be that funds belonging to these corporations can not be placed in offshore accounts, but must remain in American financial institutions. This proposal I believe would lower the jobless rate significantly thus improving the overall economy. When people have jobs, the economy grows. All businesses then become more profitable as the demand for their products becomes greater.
   John McCain comes closer than Obama to being able to do this.
   Please give me your opinion.
2. Spock (rhp) says:

   July 3, 2009 at 9:24 am

   you’ve failed Economics 101. please re-read the part about why trade occurs at all … that’s the "comparative advantage" part in Adam Smith.

   ***
   "My proposal is to keep in place the tax levels currently given to large corporations, but insist that they meet specific requirements to remain at that level. Requirements such as, No jobs being outsourced to other countries and those already outsourced must be brought back to America and to American workers. Another requirement would be that funds belonging to these corporations can not be placed in offshore accounts, but must remain in American financial institutions. This proposal I believe would lower the jobless rate significantly thus improving the overall economy. When people have jobs, the economy grows. All businesses then become more profitable as the demand for their products becomes greater." <– your proposal

   This amounts to protectionism in disguise. That is anti-free trade from the get-go and completely fails Econ 101.
   References :
   mba/cpa and investor
3. Steve D says:

   July 3, 2009 at 9:26 am

   unluckily, you have misused two statistics-

   first, about half of Americans used their first stimulus check for what it was intended – not the 2% you cited (source: http://www.associatedcontent.com/article/1127828/is_a_second_economic_stimulus_check.html)

   Second, various studies show that the supply side economic package pushed through during the Reagan years was not the piece that bounced the economy – in fact, the bipolarization of the wage economy increased (fewer middle class workers, more poor and rich).

   The tax cuts pushed the US further into debt and the deficit spending eventually came home to roost under President Bush I’s term – no fault of his, just he was the one who was in office when the economy caught up.

   Notice further that the economy did not start slowing down until the current President Bush first starting whittling away at the plot to run surpluses and really pay off the national debt. Then couple that with extra spending arising from the war and you get a recipe for contraction.

   Does that mean our tax system doesn’t need to be overhauled? No. It certainly does. But rather than providing incentives to keep jobs here, why not just eliminate the incentives to moving jobs offshore. Reduce tax breaks for certain expenses, increase transparency of the financial markets. Look to place the financial markets on a more equal footing.

   Let’s take a page from Reagan and make a new Resolution Trust Corp. But, let this Corp. buy underperforming loans (fund it with the $750 billion from the bailout). These loans would then be refinanced regardless of equity (thus providing a funding source for mortgage holders who are underwater). What this would NOT do is wipe out the mortgages nor provide sweetheart financing – financing for the new mortgages would be at market levels. People defaulting on these loans would have their houses foreclosed much as they are now. By removing these underperforming loans from the banks at face value, we shore up the banking sector. By providing new financing for the home owner, we provide an avenue to avoid massive new foreclosures. By avoiding more foreclosures, we eliminate some of the oversupply of houses on the market, stabilizing the market. And finally, by putting this in the hands of the government, with proper underwriting and risk evaluation, the government could really make money (imagine if most of these loans – say closer to the historic 2% foreclosure rate – were really paid) and pay down some of the national debt.

   To properly assure non-partisanship – the new lending corp should have a balanced BoD, say 3 citizens with business experience, 3 members named by the minority party and 3 by the majority party with the chairman named by the three citizen members. Terms would be staggered to cross presidential election dates just in case. Books would be audited by the Office of the Comptroller and an independent auditor annually and made public. Meetings would be public as much as possible. I would be open to other oversight suggestions

   But, since this benefits everyone (banks, home owners, localities, builders, home buyers), it will never happen.
   References :

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