Will Obama’s small business plan work to create jobs and expand the economy? The President has several job creating proposals, many target small business, through the SBA, with the goal of creating jobs.
In most cases, when Government tries to create jobs and ignite the economy, it has failed. However, in the past, two presidents have succeeded. During the Great Depression Roosevelt’s plan, building bridges, roads, and parks, put people to work. During the recession of the 1970′s and early 80′s, Reagan’s plan, cut taxes and concentrated on industries that would have the greatest impact on jobs, thus lowering the countries unemployment rate.
Obama faces many of the same issues that Roosevelt and Reagan did. Looking in the past, which plan will work best for the country today.
First let’s review some of Obama’s policies and proposals:
- $30 billion to go to community bank. The funds would be used to lend money to small businesses
- $33 billion tax credit for small businesses that hire new employees.
- Increases on the caps for Small Business Administration loan programs.
- 12 months ago the President enacted the American Recovery Capital (ARC)
The White House is sending a clear message, help small business grow. Obama is currently focused on small business SBA Loans in order to produce jobs.
Roosevelt felt that the Government was the only solution. During the Depression, small business did not want to invest money. Fear of economic instability paralyzed the economy, consequently owners saved money and did not hire new employees. Economist at the time concluded that banks and businesses would only keep their capital and not lend, or spend. The result was Government sponsored job projects.
Reagan felt tax breaks would give many small business owners more money to grow. In a radio address to the country, Reagan explained that most small business owners filed personal, not corporate taxes. Lowering personal taxes would help the owners keep more money in their business, explaining that the government can’t solve the problem, government is the problem.
Obama is facing the same troubles that Reagan and Roosevelt did during their Presidency.
Who had the best policy to create jobs? They both did. Reagan and Roosevelt faced different situations and circumstances. Obama has been taking plays from both game plans. The American Recovery Capital Act and the recent Small Business Plan proposals seem to be embracing both ideas.
Ultimately this will not make either political party happy, which is a sign that Obama may be on the right path.
