Sunday, October 14, 2012

Economic Growth:  Most of the new jobs in the United States are created in small businesses.  In order to create these jobs, we need the upper class (the rich) to invest in new or existing small businesses, and for the middle/lower class to be able to get loans and use it to create small businesses.

For the rich, they need to feel that there is a probability of making a profit, without which, they will not invest.  For the middle/lower class, they need to be able to obtain loans to start their new businesses, and, again, to feel that there is propability of success.  The likelihood of the rich, or the middle/lower class, investing is diminished if there is uncertainty.  One factor of uncertainty is "Obamacare".  A cost driver requiring businesses to provide health care (or pay a penalty).  Another uncertainty would be the administration's proposed increase in the current income tax rate for the upper class.  A third uncertainty, possible capital gains tax increases - which would lower the profit potential (while the risk of losing money on the new investment remains constant) also decreases the likelihood of investment. Uncertainty is not an inducement for investment. 

For the middle/lower classes, they need to be able to get a loan to start their new business.  Excessive banking regulations (Dodd/Frank) that inhibits, or prevents, the ability of people to get loans hurt job growth.  We need to make sure that reasonable business ventures "get a shot" at being created and becoming a success.

Attitude and expectations play an extremely important role in job growth.  Investors need to feel optimistic about the future - that their possible fiscal venture has a reasonable chance of success.  Our goal needs to be to do everything we can to make the climate favorable for investment, business creation, and job growth.  Without this investment, these businesses will simply not get built, and therefore the new jobs won't be forthcoming.  For, in new startups, they "did build that".

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