Small Business Cash-for-Clunkers

“I have proposed a new tax credit for more than one-million small businesses that hire new workers or raise wages …” -- President Obama’s Weekly Address, 2/6/10

The most recent stimulus proposal by this economically clueless administration is going to be another failed cash-for-clunkers style proposal. Like cash-for-clunkers, this initiative is a one time steroid shot for small businesses and its effects will not have any lasting impact on small business growth, while waisting billions of taxpayer's money.

For the record, a tax credit is scored in the budget as a “tax expenditure”, which is the same as government spending. So once again, this president proposes to spend his way out of this recession. However, don’t make any mistake about it; he is packaging this initiative up as a tax relief policy to fool the Scott Brown/Tea Party Americans into thinking he is a tax cutter. This is not a free-market policy, and in no way is different than if the central government were to pay small businesses to hire employees, which we know as an outright big government interventionist play.

If Mr. Obama truly wanted to get small businesses hiring again, he would start talking about some economic policies with real growth impact. Policies such as lowering taxes, deregulation, paying down our debt with the remaining TARP funds, and cutting down this beaurocratic leviathan we call the U.S. government.

He needs to go back to school and learn that government beauros don’t create prosperity; they can only free up the environment for capital to grow and allow the collective efforts of private interests to create it. Then and only then, will we get out of this mess. As of now, he is only digging a deeper hole and locking more chains on the flow of capital.

-- Justin Kaechele