Economy Needs Heart Transplant, Obama Offering Band-Aid
America's economic situation needs an emergency heart transplant, but Obama and the Democrats keep offering band-aids instead. We need a major change in government economic, tax, and fiscal policies not more government bailouts. Yet the president is doing nothing to reverse the enormous uncertainty fostered by his own administration's aggressive anti-business and pro high-tax initiatives and rhetoric.
In the latest indication that our president has no clue why businesses are struggling and unwilling to hire, Obama is trying to force through another $30 billion government bailout program to "help banks boost lending to small businesses."
Unfortunately, it's not the lack of available funds that are stopping businesses from expanding and generating new jobs. It's the massive economic uncertainty and instability created by misguided government mandates (especially the oppressive regulations of ObamaCare), coupled with the massive tax increases coming in January 2011, that have spooked companies and forced them into defensive economic positions.
A few months ago, Steve Wynn, the American entrepreneur and casino resort/real-estate developer, warned that our government's own unpredictable and irresponsible policies had created a frightening business climate in America and brought about an atmosphere of uncertainty for everyone.
"So when you ask me today about predictability and uncertainty in China compared to Washington, I take China. Washington is unpredictable these days. Washington is No one in the business community from one coast to the other has any idea whats next. And whats even worse, the people that do business with us that buy our bonds in other countries dont even know whats next. The uncertainty of the business climate in America is frightening, frightening to everybody. And its delaying the recovery."Since 2006, under the "leadership" of the Democrat controlled Congress we have witnessed the unthinkable, communist China now has lower corporate tax rates (25%), more stable regulatory policies, and a more business-friendly economic environment than the "free-market" United States. Even the communists understand how capitalism works and what governments must do to help stimulate economic activity and encourage private sector job creation.
Meanwhile our own ivory-tower president, who has never started a company or created one private sector job in his life, continues to deny reality and blame the Republicans for refusing to go along with more socialist "solutions" and endless government bailouts; "A partisan minority in the Senate has been standing in the way of giving our small business people a simple up or down vote on this bill," said the president. "Small business owners... don't have time for political games."
Ironically, it is the very "political games" and hundreds of billions of dollars in government "stimulus" programs, forced through by Obama and the Democrats, that have scared small businesses and negatively influenced economic activity, while simultaneously increasing economic risks and fiscal instability.
Small businesses, responsible for approximately two-thirds of all new jobs in the United States, are not expanding and hiring because they are frightened by what the government has done and promises to continue doing. Offering them more bank loans will do little to persuade them to ignore reality and endanger their positions. Unless and until President Obama and Congress address the threats of higher taxes, militant and oppressive government regulations, and increasing levels of deficit spending, no amount of easy money and government bailouts will ever motivate businesses to expand in the increasingly unstable and turbulent economic waters of America. They are seeing the mounting risks all around us and are correctly refusing to budge.
Chris Banescu blogs at chrisbanescu.com.