Post by concernedtrucker on Mar 23, 2009 7:06:59 GMT -5
Stimulus, bailouts and the death of small business
Sunday, March 22, 2009
Commentary by Kelly Niemi
For The Daily News
Like many Americans I am extremely concerned about the economy and the stimulus package, bailouts and tax plans that are being proposed and implemented by the federal government. The amounts and long-term impacts are beyond comprehension for the average American and even the most informed economists.
The very foundation of our nation’s economy is still the small business (private sector, free enterprise). Southwest Washington is a prime example of the role of the independent entrepreneur. Here there are literally thousands of small businesses that employ one to 100 or less employees — independent truckers, owner operators, tree farmers, farm enterprises, logging companies, fisheries, construction companies, service companies, retail sales, and the list goes on. These are the backbone of our local and national economy. Collectively they employ more people than the major industries.
As a small independent businessman, many of the proposed policies have a profound impact on the ability and incentive for me and others to invest in our economy.
Capital formation is fundamental to starting any business. Corporations can issue stock and sell bonds. The seed money for a small business is revenue that is earned, saved or inherited. It is extremely difficult and takes too long to accumulate capital for investment from discretionary wage income.
Capital gains, investment tax credits and inherited assets are the foundation of most small business formations. Small business needs banks that will lend secured money to small business for start up and operating capital.
The bailout package recently passed by Congress granted some $25 billion to Bank of America. I was appalled to hear on the news that Bank of America invested some $7 billion of that money in construction projects in China. That is the most outrageous outsourcing act imaginable. That is money that should be available to small businesses here in the United States, businesses that would employ people, produce products and tax revenues. This total irresponsible lack of executive and congressional oversight could cast a complete disintegration of our nation’s economy.
Now we see Bank of America taking our tax money and investing in a country that is competing with American industry. We see an energy-independence program to build windmills. The vast majority of that cost is importing all of the equipment from foreign countries. The Port of Longview is filled with the steel towers, generators and wind turbines. All of the components are imported. Even the towers are constructed in China, financed with our tax dollars.
The huge federal spending by increasing the money supply is going to trigger a period of double-digit inflation, far worse than what we experienced near the end of the Carter administration. Interest rates shot up and industrial and home construction plummeted. The timber industry collapsed as bad as it is today. Companies defaulted on state timber sales. Employees struggled to try to keep wages in line with inflation.
Capital gains taxes became a tax on inflation as the long term investment lost its purchasing power. Even FDR recognized the risk of inflation in the book, “Nothing to Fear (The first 100 days).” The medical field (The Daily News, March 15) is drowning in public bureaucracy. Our education system is overloaded with administration.
The proposed policies to increase capital gains tax, income taxes, estate taxes and others will consume the revenue that is essential foundation needed to start and maintain a business. Proposed policies are in danger of consuming the ability and destroying the incentive of individuals to invest in our economy. The stimulus packages, bailouts and proposed tax policies might be better identified as assisted suicide of small businesses.
Sunday, March 22, 2009
Commentary by Kelly Niemi
For The Daily News
Like many Americans I am extremely concerned about the economy and the stimulus package, bailouts and tax plans that are being proposed and implemented by the federal government. The amounts and long-term impacts are beyond comprehension for the average American and even the most informed economists.
The very foundation of our nation’s economy is still the small business (private sector, free enterprise). Southwest Washington is a prime example of the role of the independent entrepreneur. Here there are literally thousands of small businesses that employ one to 100 or less employees — independent truckers, owner operators, tree farmers, farm enterprises, logging companies, fisheries, construction companies, service companies, retail sales, and the list goes on. These are the backbone of our local and national economy. Collectively they employ more people than the major industries.
As a small independent businessman, many of the proposed policies have a profound impact on the ability and incentive for me and others to invest in our economy.
Capital formation is fundamental to starting any business. Corporations can issue stock and sell bonds. The seed money for a small business is revenue that is earned, saved or inherited. It is extremely difficult and takes too long to accumulate capital for investment from discretionary wage income.
Capital gains, investment tax credits and inherited assets are the foundation of most small business formations. Small business needs banks that will lend secured money to small business for start up and operating capital.
The bailout package recently passed by Congress granted some $25 billion to Bank of America. I was appalled to hear on the news that Bank of America invested some $7 billion of that money in construction projects in China. That is the most outrageous outsourcing act imaginable. That is money that should be available to small businesses here in the United States, businesses that would employ people, produce products and tax revenues. This total irresponsible lack of executive and congressional oversight could cast a complete disintegration of our nation’s economy.
Now we see Bank of America taking our tax money and investing in a country that is competing with American industry. We see an energy-independence program to build windmills. The vast majority of that cost is importing all of the equipment from foreign countries. The Port of Longview is filled with the steel towers, generators and wind turbines. All of the components are imported. Even the towers are constructed in China, financed with our tax dollars.
The huge federal spending by increasing the money supply is going to trigger a period of double-digit inflation, far worse than what we experienced near the end of the Carter administration. Interest rates shot up and industrial and home construction plummeted. The timber industry collapsed as bad as it is today. Companies defaulted on state timber sales. Employees struggled to try to keep wages in line with inflation.
Capital gains taxes became a tax on inflation as the long term investment lost its purchasing power. Even FDR recognized the risk of inflation in the book, “Nothing to Fear (The first 100 days).” The medical field (The Daily News, March 15) is drowning in public bureaucracy. Our education system is overloaded with administration.
The proposed policies to increase capital gains tax, income taxes, estate taxes and others will consume the revenue that is essential foundation needed to start and maintain a business. Proposed policies are in danger of consuming the ability and destroying the incentive of individuals to invest in our economy. The stimulus packages, bailouts and proposed tax policies might be better identified as assisted suicide of small businesses.