A Global Phenomenon
It appears to be a global phenomenon: increasingly downbeat small business owners who see a completely different economy than the one that exists for large corporations. The current monthly survey of small business sentiment conducted by the National Federation of Independent Business states “seventy-three (73) percent of the owners report that the current period is not a good time to expand. Of those, 66 percent cite the weak economy as the main reason, but 18 percent cite the “political climate” as the source of uncertainty. This elevated level of concern has prevailed since January 2008 when Congress began debating the “stimulus” and other possible actions to deal with the economy and the government changed hands. The expiration of the Bush tax program and the implementation of the health care bill represent the two largest tax increases in modern history. Add to that serious talk of a VAT and passing cap and trade. Nothing here to create optimism about the future for business owners or consumers. Top that off with government borrowing of $1.8 trillion last year and $1.5 trillion this year and on into the future, it is no surprise that owners are fearful and pessimistic.” The survey didn’t find concerns about small business access to capital as the most credit worthy businesses are reluctant to assume additional debt: “The saving rate is over six percent, good for the long haul but tough for firms that became accustomed to a “zero” savings rate supported by unsustainable home price appreciation and the borrowing that supported. But most “good” borrowers are on the sidelines, still waiting for a reason to seek a loan and expand their businesses.” To read the report in its entirety, click here.