Another good step is the Small Business Jobs and Credit Act of 2010, which the Senate passed last week after great delay. Small businesses still struggle, and this legislation would create a $30 billion lending fund and provide $12 billion in tax breaks to help these crucial drivers of jobs and growth prosper.
Keeping tax cuts for the middle class also makes economic sense. But breaks for the rich do not. They swell the deficit and they don’t create jobs.
– Heather Boushey, senior economist, Center for American Progress
The US Senate just passed a bill called the Small Business Jobs and Credit Act. The thrust of the bill, which has been called “Son of TARP,” is a $30 billion Small Business Lending Fund to subsidize banks to lend to small firms. The government will infuse cash into banks by buying preferred stock and in turn prod the banks to make certain kinds of small-business loans using “linguistically and culturally appropriate outreach.”
But haven’t we tried before this top-down method of subsidizing and pushing the banks to meet the government’s objectives with TARP and housing programs? And why are we propping up the same old banks? According to the Kauffman Foundation, businesses less than five years old are America’s top job creators.