Obama's Plan to Help Small Businesses Evaporates

Last week, President Obama announced his administration's plan for a, "New Small Business Lending Initiative." The new initiative is the next installment in a series of speeches by President Obama, which have yet to yield any results for the small business community.

In his speech President Obama stated, "This administration is going to stand behind small businesses. You are our highest priority because we are confident that when you are succeeding, America succeeds." (http://www.whitehouse.gov/the-press-office/remarks-president-small-business-initiatives-landover-md) Over the past year, President Obama promised to restore the Small Business Administration's (SBA) budget, restore the SBA Administrator to a cabinet level position, implement the 5 percent set-aside goal for women owned firms, and stop the diversion of federal small business contracts to corporate giants. To date, none of these promises have been honored. (http://www.barackobama.com/2008/02/26/the_american_small_business_le.php)

Since the recession began, the government has spent roughly $2.8 trillion to stimulate our nation's economy. (http://money.cnn.com/news/storysupplement/economy/bailouttracker/) President Obama stated that stimulus spending has led to small businesses receiving $13 billion in new loans and $4.3 billion in federal contracts, for a total of $17.3 billion. That means small businesses have received only 0.6 percent out of the $2.8 trillion in stimulus funds invested by the government. In comparison, AIG received $180 billion in taxpayer money, while America's 27 million small businesses have received $17.3 billion.

Regarding the new initiative, Keith Girard in Allbusiness.com stated, "whether they [Obama Administration] will get desperately needed capital to small businesses in a meaningful way is problematic at best." (http://www.allbusiness.com/economy-economic-indicators/economic-conditions-depression/13271042-1.html) On the Huffington Post, Arianna Huffington stated, "if this were really a high-priority for the administration, it could, you know, actually do something about it. Right now. The executive branch has plenty of weapons at its disposal to force banks still dependent on billions of dollars in taxpayer funds and guarantees to change behavior." (http://www.huffingtonpost.com/arianna-huffington/barack-obama-is-doing-my_b_334631.html)

Last year President Obama stated that for every billion dollars spent, 40,000 new jobs would be created. (http://bit.ly/2eiyas) Based on the Obama Administration's estimates regarding job creation, stimulus spending to date should have created 640,000 jobs, however, a recent report has revealed that only 30,383 jobs have been created. (http://www.recovery.gov/Pages/home.aspx)

On August 18, President Obama announced a government-wide plan led by SBA Administrator Karen Mills and Commerce Secretary Gary Locke to increase contracting opportunities for small businesses. The plan included over 200 events nationwide within 90 days; over 70 days after the announcement no schedule of these events has been released. (http://www.sba.gov/idc/groups/public/documents/sba_homepage/news_release_09-58.pdf)

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Comments

[randeg]

It is a shame that President Obama's desire to help the small businesses has not materialized in the real sense. This article is a good one to send to him because he may not have all the facts in his hands. He has a good heart and is not going to enrich himself so the important thing is whether the correct information is getting through to him.

Evelyn Guzman
http://www.homebusinesssteps.com (If you want to visit, just click but if it doesn’t work, copy and paste it onto your browser.)

[Read2know]

So many promises being made and so little actually being done. What will it take to get the Obama administration to realize that small businesses really are the backbone of the US economy?

[kevlar0076]

I thought that trickle-down economics was proved to not work after Reagan, then, ok, after Bush Jr., but it seems that the government stimulus has been trickle-down economics repackaged for a Democrat as "stimulus." We the people have spent literally trillions of dollars to bailout these crooks who made poor business decisions because they were deemed "too big to fail." Where is the help for the millions of small businesses who helped bailout these crooks and are now going bankrupt because there is no help for them?

[Ashki]

This is just depressing. What is going to happen to this country for not only us, but our children. Someone is going to have to pay this bill. It will be us at our old age and our children and their children. Obama has tried the politician way of stimulating the economy by paying all the wealthy businesses. How about trying it the human, moral, and ethical way by supporting the foundation and strength of America, small businesses.

[marinara]

I must respectfully point out an omission made by the blogger. Year over year, SBA loans are declining. Yes that means the government is giving less to small business this year than in 2008.
http://www.usnews.com/money/blogs/risky-business/2009/1/7/sba-loans-continue-to-decline.html

[Rule Of Law]

Obama had a chance to make the SBA really do its job and hand down contracts to true small businesses, but didn't. Today the usual suspects from the Fortune 500 still receive from the SBA what should go only to America's small businesses and the working Americans they employ. This thing smells from top to bottom.

[Rule Of Law]

and once more--

Obama had a chance to make the SBA really do its job and hand down contracts to true small businesses, but didn't. Today the usual suspects from the Fortune 500 still receive from the SBA what should go only to America's small businesses and the working Americans they employ. This thing smells from top to bottom.

[Lloyd Chapman - Huffpost Blogger]

Thank you for your observation. That said, let me make several things clear:

- Small businesses are the backbone of our nation's economy.
- Small businesses are responsible for 90 percent of innovations, 50 percent of nation's GDP and over 50 percent of our non-farm primate sector workforce.
- Economists in the pedigree of Laura Tyson have agreed that sending funds allocated for federal infrastructure spending to small businesses is the best way to stimulate our economy.
- While lending to small businesses has decreased, government spending has increased significantly in the last several years. During FY 2008, the government spent more than $557 billion on goods and services, 23 percent of which should have gone to small businesses. The ASBL and I have estimated that the government is missing that goal by more than half.

With all of this in mind, it is essential that the government lend more to small businesses.

[Rule Of Law]

"Last year President Obama stated that for every billion dollars spent, 40,000 new jobs would be created. (http://bit.ly/2eiyas) Based on the Obama Administration's estimates regarding job creation, stimulus spending to date should have created 640,000 jobs, however, a recent report has revealed that only 30,383 jobs have been created. (http://www.recovery.gov/Pages/home.aspx)"

Oooops...

[GrimJack]

smoke and mirrors, all of the small business plans that have come out of this administration have been nothing but smoke and mirrors - no substance or follow through

[Rule Of Law]

Yep. It's like being stuck in a fun house full of mirrors, but it's not fun anymore.