Published: Monday, July 15 2013 4:55 p.m. MDT
I think stop and go traffic is a poor comparison because the care remain and
chain reactions economy is not stop and go business. Using the traffic analogy
its more like multi-car major wrecks every mile of the road.The
recession is a result of business starts and failing in predictable sequences
and no stable industry for any business to base its MTBF (Mean Time Between
Failure). Small hobby business takes out a loan on long lease and contract with
a limited and specialized customer base and once that customer base is saturated
they begin to flounder until they run out of Line of credit funding. Small business advocates are not looking at the long term sustainability.
Every dime a small business gains as profit has to be rolled over into an
increasing debt to income ratio. A business operating on line of credit debt has
no future or growth to reach beyond hobby status. For a business to profit they
have to have cash flow, credit cards and fees destroy cash flow with delayed
returns fixed overhead costs. Flow in has to exceed flow out and its not
happening for many reasons.
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