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Government Takeover: Is Your Small Business Next?

Guest post by: Michael Hume

Article Overview: The President this morning gave another campaign speech highlighting all the things the U.S. government has done to help America's economy. The recently-signed finance reform bill, he noted, will end corruption and bail-outs of those fat cats on Wall Street. Meanwhile, he said the government is working on a $50 billion package of loans for small businesses, ostensibly to create jobs and get the economy moving.

Government Takeover: Is Your Small Business Next?

Finance Reform Further Limits Loan Options The President this morning gave another campaign speech highlighting all the things the U.S. government has done to help America's economy. The recently-signed finance reform bill, he noted, will end corruption and bail-outs of those fat cats on Wall Street. Meanwhile, he said the government is working on a $50 billion package of loans for small businesses, ostensibly to create jobs and get the economy moving.

Experts who apparently know much more about the economy than do the President's teleprompter writers have a different opinion of the finance reform bill. They say the new law will keep $2 trillion firmly on the sidelines of the U.S. private sector, and that will extend the hardship on entrepreneurs who need private investment for start-up, expansion, or simply to stay in business until the economy comes back.

Let's say that's true. You're a small business operator, and you need cash to grow or maintain your business, and you ain't gonna get it from private investors who (thanks to this "reform") are too shell-shocked to invest in you. What can you do?

Well, lucky for you, according to the President, the government is here to help you. Don't think of the credit Uncle Sam is ready to dole out to you as a "bail out," no sir. After all, you are not too big to fail, are you?

No, you aren't. All it would take is a return to the level of tax burden you carried before the 2002 cuts, and fail you well may.

And Uncle Sugar will be your big creditor.

Of course, many in Congress and the administration are talking about extending the "Bush Tax Cuts," though the horse-trading about who will get what reprieve is only just underway. Will they really extend those cuts, when one of the President's main campaign whines was that Bush's tax breaks for "the wealthy" had to go? Just imagining how that will play out, this doesn't seem so far-fetched: the Democrats hold control of Congress after the November elections, and immediately end the tax cuts because they're now safe for two more years. Or the Republicans gain control, and the Democrats end the tax cuts before the new Congress can be sworn in, since they know the GOP will not have the votes to override a veto. Either way, it seems life next year will be pretty rough for an entrepreneur forced to turn to Uncle Sam for a loan this year.

Does that constitute a "government takeover" of your business? Your call. Maybe it's just semantics. But if you lose your business, does it matter?

In the meantime, think about what you can do to steel yourself for the coming storm. How much of your business can you move into the low-overhead world of cyberspace? Is your business positioned as well as possible in terms of tax advantage? Is it time to switch businesses, and maybe start up a new internet business with lower costs and less liability? If you go that route, I can recommend a platform and a community to help you address all these concerns.

This, though, seems to be the bottom line: take over control of your business, or someone else will.

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Article Tags: economic reform, finance reform, government small business loan, government takeover



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