President Barack Obama outlined his proposals today to create jobs and make homes more weather resistant. Excuse me, Mr. President, but what you addressed at the Brookings Institute was happy talk.
First, what he proposed.
In addition to proposing a tax cut for small businesses to encourage hiring, he called for eliminating capital gains on these businesses for one year and suggested that money left over from the financial bailout program, the Trouble Asset Relief Program, should be redirected toward small businesses. He also proposed investing new money in roads, bridges and other infrastructure improvements, and offering rebates to people who make their homes more energy efficient.
The president at least acknowledged it was up to Congress to enact the proposals and that the Republicans were acting irresponsibly by claiming further stimulus programs only added to the nation’s growing deficit. To that point he charged:
… Republicans for criticizing his administration’s spending, saying that he inherited a $1.3 trillion deficit when he took office, largely because tax cuts and entitlement programs were not paid for during the last administration.
“These budget-busting tax cuts and spending programs were approved by many of the same people who are now waxing political about fiscal responsibility while opposing our efforts to reduce deficits by getting health care costs under control,” Obama said. “It’s a sight to see.”
Political grandstanding notwithstanding, the crucial problem facing small businesses is the simple fact they cannot borrow money at the same interest rates of those corporations and financial institutions deemed by the government as “too big to fail.”
Compounding the problem is the credit crunch still extends to the consumer in which lending shrank another 1.7% in October, a 3.5% decline amounting to $3.5 billion since its peak in July 2008, according to calculations by the Federal Reserve. Consumer credit activity accounts for two-thirds of U.S. economic growth.
My point, Mr. President, is that you can offer tax credits to encourage hiring and freeze capital gains for a year but if small businesses cannot receive credit to buy inventory and pay its bills all those gimmicks go to naught. And if consumer credit tends to decline who the hell is going to buy their products?
I’m all for the president to use his office as a bully pulpit. But, speak straight to the issue, man. Nix the happy talk and can the excuses. We’ve heard that song before.