Comments about ‘Flower shop owner, Zions Bank hail new small business bill’

* 'Republicans block small business lending bill' - By Stephen Ohlemacher - AP - Published by DSNews - 07/29/10

Line:
'The bill would create a $30 billion government fund to help community banks increase lending to small businesses...'

RE: Pagan

Until a small business has demand for their product or service why would they borrow money? If they are borrowing money to meet short-term expenses because their cashflow isn't sufficient because they are losing money what is the probability they will be able to pay the loan back? If they are unable to pay the loan back, then the government is on the hook to make the lending institution whole.

The republicans tried to block the bill because of the parts of the bill that had nothing to do with the core of the bill.

If the president wants to help small business, put more money in the pockets of all consumers, rich and poor by cutting taxes. A basic rule of economics is the consumer will do two things with the money they have, spend or save. If the consumer has faith that the economy is recovering they will spend the money, if they are worried they will either save the money or paydown debt.

All of the emperical evidence shows when taxes go down, tax revenue goes up. That's why JFK pushed massive tax cuts.

'If they are borrowing money to meet short-term expenses because their cashflow isn't sufficient because they are losing money what is the probability they will be able to pay the loan back?' - CPA Howard | 2:35 p.m. Sept. 27, 2010

That's not a fact, that is a question.

Your answer....


'As Banks Repay Bailout Money, U.S. Sees a Profit' - By ZACHERY KOUWE - NYTimes - 08/30/09

'The profits, collected from eight of the biggest banks that have fully repaid their obligations to the government, come to about $4 billion, or the equivalent of about 15 percent annually, according to calculations compiled for The New York Times.'



You might claim the NYTimes is a 'liberal source', etc. But I have still provided facts. Something you can verify yourself. And if we should provide 'massive' tax cuts, then please answer why the Bush era tax cuts cover only 2% of America?

Now That’s Rich - By PAUL KRUGMAN - NY Times - 08/22/10

'According to the nonpartisan Tax Policy Center, making all of the Bush tax cuts permanent, as opposed to following the Obama proposal, would cost the federal government $680 billion in revenue...'

RE: PAGAN

The failure rate for small business is the highest for any group of business, drive by your local strip mall. The only reason the banks held on is because of the massive infusion of cash, the government took all of the bad assets of their books, and a some what sound business model.

If we take the $680 billion out of the economy, how will that help the economy grow? In 1989 Bush 41 put a tax on luxury items and as a result caused these business to either go under or have to cut back. The employees of those company were also hurt by the tax increase.

Did the tax policy center also take into account the additional tax revenue lost by pulling the money out of the economy due to the money not being spent? If money is spent in the private sector, its efficient and productive. When money flows to the government it's ineffective and unproductive.

TheThat 2% covered by the tax cut, pay the majority of the taxes. Over 50% of the work force doesn't pay taxes for the benefits they receive, how is that fair?

The banks aren't just being handed 30 Billion, and that money goes away... that money is loaned at discount rates - and must be repaid, much like student loans.

CPA is correct that most small businesses are riskier loans to make, and hence why funding for them has all but dried up recently. That doesn't mean small businesses don't need credit lines to operate, they still do. But those funds have either dried up or gotten very expensive, out of reach to many.

What this fund does is provides banks with a discount line of credit to extend to these smaller businesses. These funds would still have to be repaid - it is not money that is going to disappear into the ether.

And to the thing CPA says, this is extending credit to the companies for them to invest in their businesses, rather that the government spending directly that 30 billion.

The Republicans didn't try to prevent this bill because it was bad legislation, they didn't like it because if gave small banks something big banks wouldn't do themselves. Big banks hate small banks and credit unions... this was one more blocking attempt.

It's too bad the GOP fought this bill. As it is successful, they will now try to take credit for it. Just like they bad-mouthed the stimulus bill, then in the days following asked for the money for their districts and bragged about getting the money. The brazen hypocrisy of the Republicans is astounding!

Perhaps, anything to help small business is better than nothing. However, this bill is the worse example of government help. Any bank that participates has a new partner the Federal Government to whom they now must pay a dividend. This is in addition to the discount rate of money paid to the fed. The higher amount of loans and changes to the SBA program including reduction of fees are welcomed changes, but could and should have been done without the other portions of the bill. Banks, including community banks in the main do not need $, they need quality borrowers, and small businesses with the destruction of the income and employment by the Bush Adm and Obama Adm. are hardly credit worthy.

Isn't this trickle down economics? Giving tax breaks to those rich fat-cat business owners so that they can just get more money.

I thought liberals claim that trickle down economics don't work. If it doesn't work, why are they doing it?

Could it be that trickle down economics does work?


I just wish that the law that Obama signed didn't have the $30 billion loan program attached to it.

Pagan,
this well-intended but flawed bill is not aimed at the big banks who have paid back their TARP money with interest. Are you giving bush credit for TARP?

I'm sure you will once you realize the 2009 (OLD) NYT article you quote has been superceded by a CBO estimate that the US will LOSE at least $66 billion from TARP. BTW, Zion's doesn't qualify as a "community" bank, they are large enough to be considered a regional bank. and bush's tax cuts are off-topic.

zions is already the largest SBA lender in the state; this just provides them with more gravy.

Esquire,
how can you say the bill has been successful when it was just signed? And of course they would fight to get funds for their districts from the porkulus, since their constituents will have to pay for it. If they could have exempted thier districts from having to pay for it, then they should turn down the money.

No, this bill is a bad idea. if your kid is hungry, you buy food; this bill buys clothes. Clothes are nice, but don't address the problem.