Government Job Creation – Is it a Good Thing Or Bad?

By | November 1, 2017

Complaints are often voiced in various forms of how large and monstrous the federal government has grown. The federal government has indeed out grown the scope that the Constitution originally intended it to be. However, as oppressive and invasive as it has become there is a smaller more aggressive form of government that has sprouted up. It has become much more bold and unruly in many ways than its big brother.

This smaller entity is no less your local and state governments. In a span of 47 years local governments nationwide have increased spending by four times. It has also increased its employment pool by 4.2 million since 1980. With the increase in jobs so increases greater tax burdens in order to pay for pet projects, lavish health and retirement benefits. When growth takes place in government so dose the special interest groups and non elected committees.

These committees have assumed political policy making powers. Regional governments formed from multiple counties or cities begin to set policies for such things as zoning laws, property taxes, local sales taxes, as well as impact fees. With the myriad layers of political red tape one must encounter in the basic form of government one is now faced with the additional burden of finding who really controls the political process. Local governments are much more difficult to control because the smaller number of people it takes to make up a majority, thus the legal plunder method is more attractive at the local level.

Whether we go eye to eye with the lion, or the cub, one must be aware of the damage that can be inflicted if left to roam freely. Federal and local governments are consuming trillions of dollars and spending it as fast as it can be collected. It may well be time to return them back to the cage they belong in.

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Product Description
The SBA administers several programs to support small businesses, including loan guaranty and venture capital programs to enhance small business access to capital; contracting programs to increase small business opportunities in federal contracting; direct loan programs for businesses, homeowners, and renters to assist their recovery from natural disasters; and small business management and technical assistance training programs to assist business formation and expansion. Congressional interest in these programs has increased in recent years, primarily because assisting small business is viewed as a means to enhance economic growth.

Some, including President Obama, have argued that the SBA should be provided additional resources to assist small businesses in acquiring capital necessary to start, continue, or expand operations and create jobs. Others worry about the long-term adverse economic effects of spending programs that increase the federal deficit. They advocate business tax reduction, reform of financial credit market regulation, and federal fiscal restraint as the best means to assist small business economic growth and job creation.

During the 111th Congress, several laws were enacted to enhance small business access to capital. For example, P.L. 111-5, the American Recovery and Reinvestment Act of 2009 (ARRA), provided the SBA an additional $730 million, including $375 million to temporarily subsidize SBA fees and increase the 7(a) loan guaranty program’s maximum loan guaranty percentage to 90%. P.L. 111-240, the Small Business Jobs Act of 2010, authorized a $30 billion Small Business Lending Fund to encourage community banks to provide small business loans ($4 billion was issued), a $1.5 billion State Small Business Credit Initiative to provide funding to participating states with small business capital access programs, numerous changes to the SBA’s loan guaranty and contracting programs, $510 million to continue the SBA’s fee subsidies and 90% maximum loan guaranty percentage through December 31, 2010, and about $12 billion in tax relief for small businesses. The SBA subsequently was provided authority to continue the fee subsidies and the 90% maximum loan guaranty percentage through March 4, 2011, or until available funding was exhausted, which occurred on January 3, 2011.

During the 112th Congress, several bills were introduced to enhance small business access to capital, including bills to extend the SBA’s temporary fee subsidies and the 90% maximum loan guaranty percentage. Congress did not adopt these legislative efforts. Instead, Congress passed legislation to enhance small business contracting opportunities, expand access to the SBA’s surety bond guarantee program, amend the SBA’s size standard practices, require a review and reassessment of the federal procurement small business goaling program, and expand small business mentor-protégé programs.

During the 113th Congress, P.L. 113-76, the Consolidated Appropriations Act, 2014, increased the annual authorization amount for the SBA’s Small Business Investment Company venture capital program to $4 billion from $3 billion. The increased authorization amount is designed to provide small businesses additional access to venture capital.

This report addresses a core issue facing the 113th Congress: What, if any, additional action should the federal government take to enhance small business access to capital? After discussing the role of small business in job creation and retention, this report provides an assessment of the supply and demand for small business loans and recently enacted laws designed to enhance small business access to capital by either increasing the supply of small business loans or the demand for small business loans, or both. It also examines recent actions concerning the SBA’s budget and concludes with a brief overview of three legislative options available to address small business access to capital issues during the 113th [...

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