Sunday, March 15, 2009

Help for small business

Just saw while eating breakfast that the Obama Administration plans to help small businesses by reducing lending fees and increasing small business loans. Let's think about that. First, it is a tacit statement that the government better knows who is deserving of a loan than the private sector. After all, if the small business is credit worthy and is likely to repay the loan a government guarantee isn't needed.

Second, didn't the housing boom and bust take place at least in part because government helped boost the sector through easy loans via Freddie Mac and Fannie Mae. Where did that get us? How is this any different?

If the Obama Administration really wants to help small business it should look to ease their regulatory and tax burden, but such an expansion of economic freedom would be anathema to their governing philosophy.

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