Milestones
By Miles H. Barber

The best thing for our economy would be for our government to get out of the way.

Let’s face it. Washington has tried all the “tricks” in the “How to Fix it” manual and failed. There were not a lot of bullets left in the economic rifle when they started except the ability to borrow and spend. So, they borrowed from our children and spent on non- sustainable or reproducing employment.

End result? Less employment, fewer jobs, more government regulation and a tightening noose around the neck of small business.

While Washington knows, (and most of working Americans) that 70% of all new employment comes from small business, we seem to have an administration that has never shopped at a 7-11 or had their shirts cleaned by a local laundry.

The preoccupation with “fixing” the health care system and revamping the banking system has almost totally ignored the small business system. Wouldn’t you think that if 70% of your revenue came from a particular group of clients you would pay them due respect?

The sweetheart deal afforded the banks has made them “too bullet proof to fail.” They can and are borrowing funds from the Federal Reserve at a quarter point interest and turning around and lending it back to the Feds by purchasing Treasury Bills and making a nice profit.

So let’s see how this works. You loan you neighbor $1,000 and he comes back the next day and loans YOUR $1000 back to you with interest. Why would your neighbor want to do anything else with your funds when he can make a nice profit watching Days of our Lives?

So it is with our banks. They have no incentive to loan money that has even the smallest hint of risk. Why would banks want to do all the paper work to loan out money on risky ventures like homes, cars, inventory, payrolls, and raw materials when they can loan back their government borrowed funds to the government at a nice margin of profit?

If Congress and this administration don’t get this, we have the wrong people running this government.

We don’t need another “Jobs Bill.” We need someone(s) who understand basic economics. To have an expanding economy we must have a well distributed money supply with reasonable access. With funds bottled up at the banks, there is no outgoing flow of money into small business. The economic engine that starts every economy moving can’t get any gas.

Seventy percent of the new jobs waiting to be created would happen quite rapidly by expanding the money distribution system. The Dodd-Frank bank bill did just the opposite. It made credit regulations so difficult that even a fifth grader can’t obtain a loan let alone a small business person.

By a simple stroke of Congress we could solve our economic dilemma by incentivizing banks to once again loan money to the backbone of America. The horses are ready to run and they are tied to the railing.

Instead of turning them loose this administration wants to invent a new wagon in which the horses ride rather than pull. They really should just get out of the way.

Miles Barber can be reached at Scweekly2011@yahoo.com.