Looks like the situation for small businesses in the United States is going to improve. Last week the President Obama gave a speech at the Brookings Institution (a nonprofit public policy organization ), Washington D.C. He outlined that three main areas his administration is going to focus on to generate jobs are: small business, infrastructure and energy.
“These are areas in which we can put Americans to work while putting our nation on a sturdier economic footing,” he said, “areas that will generate the greatest number of jobs while generating the greatest value for our economy.”
Obama announced investment in infrastructure and a plan modeled on “cash for clunkers” in order to encourage homeowners to make their homes more energy efficient. The President proposed a substantial increase in infrastructure spending, particularly for roads, bridges and communications networks. This way public works would engage private sector companies, spurring hiring across the country.
“Job creation will ultimately depend on the real job creators: businesses across America,” Obama said. “But government can help lay the groundwork on which the private sector can better generate jobs, growth, and innovation.”
The new program which should provide greater incentives for consumers to weatherize their homes and businesses is also announced. This way businesses and homes might become more energy efficient. The President said these projects would create jobs, save families’ money and reduce pollutions. He is satisfied with the way their development has already started. Apparently, these programs have already drawn many applicants for funding with a lot of strong proposals. These proposals are going to leverage private capital and create jobs quickly.
“With additional resources, in areas like advanced manufacturing of wind turbines and solar panels, for instance, we can help turn good ideas into good private-sector jobs.”
The President pledged to extend loan aid and tax breaks to small businesses and to create a new tax credit for hiring new workers. He suggested the Treasury would use some of the TARP (Troubled Asset Relief Program) money, originally intended to bail out banks, to help small businesses expand in the coming year. A tax incentive could encourage small businesses to add and keep employees. Obama promised waiving fees and increasing the guarantees for SBA-backed loans. These small business loans are what small businesses need to start up and grow.
By stimulating development of small businesses, the job growth is stimulated too. This is the most present issue in American society this year and one of the most important reasons why 91% of Americans believe that nation’s economy is in a very bad shape (according to the recent ABC News poll). No wonder Obama pay a special attention to this problem. He has promised to generate a job growth across the country.
Some progress is indeed noticed lately, comparing to previous situation. For example, the number of lost jobs in November is significantly lowered and the unemployment rate’s drop from 10.2 percent to 10 percent. Still, opinions that this has nothing to do with the stimulus bill are very present in the society these days. Many experts claim it is actually a consequence of lower number of people who look for work and were not counted in the monthly tally of jobless Americans.
President has announced the improvement of the economy in the United States and it is good to hear that small businesses are one of priorities on that road. Small businesses were the first to fall when recession started, so better conditions and new opportunities for their growth would, surely, give a positive shade to entire U.S. situation.
Ok I voted for Obama but seriously..with 50% of small businesses failing in the first year and 75% the following year how is this program really good for the economy? And to add further insult to injury if all these people are going to start new businesses then they will not be able to collect unemployment when their business does go belly up. This can only be good for the government and not the people in the short term and then really bad for both in the long term. People who have no chance of getting back on their feet without unemployment, without savings because they signed it over with the SBA loan, and now a failed business. How about this, extend the tax break to new hires and tax the heck out of hiring foreign workers. There are plenty of US workers ready and able to work who have a responsibility to support our government and plenty of non US workers that have zero responsibility.
I have to agree with AP in some regards. Most small businesses will fail. Most people who start them will lose their savings. And the worst part, is that they don’t qualify for unemployment. I believe in supporting small business. However, in order to qualify for loans, a small business must have a business plan and research shows that the percentage of businesses that succeed goes up dramatically if they have a business plan. So, there are some things that can be done to improve the odds of a business surviving. But the biggest factor that determines success is if the industry they are in is expanding or declining. A poor-run business in a wildly expanding industry can do very well. An excellent-run business in a declining industry can struggle. You can have good screening requirements for loans and strong support infrastructure to help those businesses survive and thrive.
I too voted for Obama. I do believe that this plan can work and yes. You do have to have a business plan. But, more than that you must have the will,belief and courage that you can succeed. All I see is a bunch of scary people, scared of change & no courage to try.
I will believe it when I see it. This is not about a fear of change or a lack of trying, it is being realistic about how business works. In this plan he wants to offer small business tax breaks to hire people, but what is he proposing to help small businesses grow sustain so they can afford to keep these employees? As you have all mentioned the rate of small businesses that fail are quite high, and that is what needs to be supported to avoid a failure later.
Also, it is imperative to support small business but they do not employee the largest numbers of people. Larger businesses that employees thousands need to be supported in order to keep America working. The largest employer is soon to be(I have to check my number again for an update) the federal government with the obvious problem being that our taxes pay their salaries. Which means new capital is not coming into the Economy, and we soon won’t have a pool to tax if jobs in the private sector are not stimulated.
Again, I believe what I see work, but this doesn’t have logic going for it.
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Thank you so much for publishing this.
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Very insightful post. I am going to link to it in my new blog….
I was just frustrated at how many people bought into it and helped try to build it up
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Thank you so much, there aren’t enough posts on this… keep up the good work
I voted for Obama as well and my livelihood depends upon other small businesses. One of the things that I am seeing is the huge number of NEW small businesses being started by people in their 50s and 60s…career company people who have been laid off. I think the failure rate in this group will be high because they are not natural entrepreneurs. Thoughtful piece. Thank you.