The President's speech on the Economy
August 30th 2010 22:26
The President spoke again today on the economy and said "The president said the small business lending initiative would help business owners "get the credit they need and eliminate capital gains taxes on key investments so they have more incentive to invest right now. And it would accelerate $55 billion of tax relief to encourage American businesses, small and large, to expand their investments over the next 14 months. Unfortunately, this bill has been languishing in the Senate for months, held up by partisan minority that won't even allow it to go to a vote. That makes no sense."
The president said the bill "is fully paid for. It will not add to the deficit. And there is no reason to block it besides pure partisan politics."
"The small-business owners and the communities that rely on them, they don't have time for political games," he said. "They shouldn't have to wait any longer...I know we're entering election season, but the people who sent us here expect us to work together to get things done and improve this economy." Noting the "serious challenges" the nation faces, the president said policymakers need to "rise above the politics of the moment to summon an equal seriousness of purpose."
A Senate Republican leadership aide said that when the Senate returns, the first legislative vote scheduled will deal with a Republican amendment to the small business bill. The Senate is not scheduled to return until September 13."
After listening and re-reading the President’s speech I thought about several things and scratched my head wondering why the President doesn’t get it.
- 1st most people and leading financial advisors tell you in order to get out of debt stop incurring more debt. Cut back the spending and start saving. So why are we proposing to accelerate of $55 billion tax relief bill as a small business initiative. So why is America taking on more debt when the debt clock is ticking even as you are reading this.
Another thought is that US Small Business’ are losing out because of the current loan rate and banks (who are under fire for multiple reasons are not lending money). In an article by Lemer and Weitzman state that U.S. Small businesses are have to pay more to borrow relative to the Federal Reserve's benchmark.
“ US small businesses are having to pay more to borrow relative to the Federal Reserve's benchmark rate than at any time in at least a quarter of a century, according to official data from the central bank.
The data suggest that small businesses - which form the backbone of the US economy - are not receiving the full benefit from the ultra-low rates that are supporting some larger employers.
Securing capital for small businesses - which account for the bulk of job creation - has been a priority for the Obama administration, which has proposed a $30bn fund to help community and neighborhood banks increase their lending.
The Fed's data show that in early May interest rates on small commercial and industrial loans, on average worth about $500,000, were 3˝ per cent higher than the federal funds rate, the widest gap since the series began in 1986” (Lemer and Weitzman, 2010).
Also banks because of TARP have decided not to lend money to those in high risk categories and or because based on economic figures and projections people are saving, not spending and not taking loans. According to Jeff Harding an economist blogger his website is Seeking Alpha says “U.S. business and consumer lending, is down because loan demand is down. All of these factors support the credit contraction charts that show consumers and businesses deleveraging, increasing savings, and are waiting for positive signs of a recovery before they resume borrowing.
These are the most important statistics in the economy right now. We ask why we have a credit crunch, why banks aren't lending, why borrowers aren't borrowing, and why money supply continues to decline. The short answer is mostly, commercial real estate loans which hold back every bank as these loans continue to go bad while they watch the commercial real estate market decline. It won't get better until banks are held to higher standard of capital and leverage which means more banks will and need to fail” (Harding, 2010).
So is it the Republican’s fault for obstructing the Small Business loan bill or is the obstruction as the President calls it is because they do not want to incur more debt because there is no way to pay for the debt that is accumulating now? Has the bill not been passed because recently the Senate and the House passed "Pay as You Go” Legislation and no one knows how to fund the 55 billion dollar proposal? Or is it that you and I get it no more spending, no more borrowing and let us tighten our belts so that there is some hope for future generations to be better off than their parents are today and an election isn’t that far off. I am not sure of the reasons and I am trying to find the proposed piece of legislation and when I do I will share it with you so that you can read it and decide what you want your congress person and senator how to vote. They let them know.
The apathy towards government stops every time you read a bill and inform your representative(s) how you want them to vote. If they do not listen to their constituents then you vote every November.
References
Really Long Link us-president-obama-talks-econ omy-amidst-technical-snafus.h tml
Jeremy Lemer in New York and Hal Weitzman in Chicago Really Long Link
Jeff Harding, Really Long Link
The president said the bill "is fully paid for. It will not add to the deficit. And there is no reason to block it besides pure partisan politics."
A Senate Republican leadership aide said that when the Senate returns, the first legislative vote scheduled will deal with a Republican amendment to the small business bill. The Senate is not scheduled to return until September 13."
After listening and re-reading the President’s speech I thought about several things and scratched my head wondering why the President doesn’t get it.
- 1st most people and leading financial advisors tell you in order to get out of debt stop incurring more debt. Cut back the spending and start saving. So why are we proposing to accelerate of $55 billion tax relief bill as a small business initiative. So why is America taking on more debt when the debt clock is ticking even as you are reading this.
“ US small businesses are having to pay more to borrow relative to the Federal Reserve's benchmark rate than at any time in at least a quarter of a century, according to official data from the central bank.
The data suggest that small businesses - which form the backbone of the US economy - are not receiving the full benefit from the ultra-low rates that are supporting some larger employers.
Securing capital for small businesses - which account for the bulk of job creation - has been a priority for the Obama administration, which has proposed a $30bn fund to help community and neighborhood banks increase their lending.
The Fed's data show that in early May interest rates on small commercial and industrial loans, on average worth about $500,000, were 3˝ per cent higher than the federal funds rate, the widest gap since the series began in 1986” (Lemer and Weitzman, 2010).
Also banks because of TARP have decided not to lend money to those in high risk categories and or because based on economic figures and projections people are saving, not spending and not taking loans. According to Jeff Harding an economist blogger his website is Seeking Alpha says “U.S. business and consumer lending, is down because loan demand is down. All of these factors support the credit contraction charts that show consumers and businesses deleveraging, increasing savings, and are waiting for positive signs of a recovery before they resume borrowing.
These are the most important statistics in the economy right now. We ask why we have a credit crunch, why banks aren't lending, why borrowers aren't borrowing, and why money supply continues to decline. The short answer is mostly, commercial real estate loans which hold back every bank as these loans continue to go bad while they watch the commercial real estate market decline. It won't get better until banks are held to higher standard of capital and leverage which means more banks will and need to fail” (Harding, 2010).
So is it the Republican’s fault for obstructing the Small Business loan bill or is the obstruction as the President calls it is because they do not want to incur more debt because there is no way to pay for the debt that is accumulating now? Has the bill not been passed because recently the Senate and the House passed "Pay as You Go” Legislation and no one knows how to fund the 55 billion dollar proposal? Or is it that you and I get it no more spending, no more borrowing and let us tighten our belts so that there is some hope for future generations to be better off than their parents are today and an election isn’t that far off. I am not sure of the reasons and I am trying to find the proposed piece of legislation and when I do I will share it with you so that you can read it and decide what you want your congress person and senator how to vote. They let them know.
The apathy towards government stops every time you read a bill and inform your representative(s) how you want them to vote. If they do not listen to their constituents then you vote every November.
References
Really Long Link us-president-obama-talks-econ omy-amidst-technical-snafus.h tml
Jeremy Lemer in New York and Hal Weitzman in Chicago Really Long Link
Jeff Harding, Really Long Link
| 52 |
| Vote |
subscribe to this blog
