Small Business And Farming May Help U.S. Soften Fiscal Cliff

by J John Swanko

Our nation is fast approaching the fiscal cliff.  One resource we did not invest in during this Great Recession, Small Business.  True, This congress spent more.  Small businesses percentage of U.S. Government contracts has not been higher.

As this Great Recession unfolded, the funding shrank.  As firms shed millions of jobs, firms making those decisions, did not have competitive consequences.  Other nations did it differently.  Germany did not shed huge numbers of employees and they instituted serious help -All costly.  It worked there.  The U.K. could have done better, and elsewhere...  This does not mean the United States did not spend money.  It did.

The U.K. sent out solicitations for firms in the U.S. among others.  While their results are a help: unemployment, international competitiveness and the like, they only recently began passing costs along to the employees (e.g. collage).  The U.S. has given support to the small business. Today, our infrastructure is very good however the dollars are not there and will not be as long as small business is not as important as farming.  Noting, farming is very important to grow a nation out of any bank failing crisis (even with the GDP constriction we saw here). 

Congress does fight hard for small business.  Quite sure those profitable small firms made real traction from the tax credits. Investment tax credits (ITC) at one time grew many small businesses.  Those credits were really abused by investors, the small businesses they grew.  As those firms grew, people were employed.  New research conducted, competition grew in more than one industry with those ITCs.

Small business support is important everywhere (another example: Australia).  Any nation crawling out of war will need small business support. 

Countries that gave support to the failed entrepreneur did far better at growing small firms.  Government support for small firms is tricky.  Could Greece be expected to grow their way out, with the current constraints, Spain?  Answering these questions sends capital markets swinging.