Opinion
SMBs key to US economic revival
By Robert Faletra
 Like it or not, the US government is and will continue to play a bigger role in business decisions for the foreseeable future. I'm not going to debate the pros and cons of what has been done to date, or whether the government should be doing anything at all. But if the US government is going to put its nose in the tent, there are some things it should do.
First off, it needs to think small. By that I mean, think small business. Far too much of what the US government has done has been centered on bailing out big businesses. The trouble is, a big business has lots of money, is well organized and can buy lots of lobbyists. Small business is, of course, unorganized, naturally fragmented and has no real political clout. Given the little lobbying a small business does through associations that have to represent large numbers of smaller organizations with varying interests, it gets little attention.
In order to think small, the US government needs to think about what it can do to help businesses generate sales, which ultimately leads to jobs, which in turn leads to growth in the economy, and which will lead to more tax revenue.
So, rather than a government spending spree, it should produce the kind of legislation that spurs private spending. It seems to me that if there was some type of tax relief for infrastructure spending by business and perhaps even by individuals, then we would see more business activity.
For instance, if a business were to receive tax credits or tax deductions on infrastructure spending, be it in the form of technology or otherwise, we would certainly see a greater willingness to spend on improving technology and other infrastructure. I would suggest there should be a larger benefit given to businesses below a certain threshold to help out smaller companies that as a category historically provide majority of new jobs.
There also should be a lowering of the payroll tax, which would make it easier for businesses to justify new hiring.
It's clear that the current stimulus program has done little to generate new jobs. Let's not forget we were told the $750 billion in stimulus funding would keep the unemployment rate in the 8 percent range.
If US is going to stimulate jobs, which is what will lead to real GDP growth, something has to be done to spur small-business investment. Otherwise, we are going to have a marginally better year in 2010 than we all did in 2009—and that just isn't going to feel very good. |