Forums: Discussions for entrepreneurs and small business.

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Melanie Rembrandt
CEO, Rembrandt Communications®, LLC
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I think what bothers me about this type of thinking is that it runs contrary to what made America great in the first place. That`s the individual, and the rewards for individual effort. Any kind of plan that involves the government in any way ultimately will be counter productive, in my opinion.

There are lots of better ways to stimulate small and micro businesses, none of which involve government participation. Instead, *removing* government from the environment would do wonders.

Consider what would happen is any startup were to be given the first $100,000 of annual revenues with zero taxes. Imagine what would happen if ALL federal and state employee taxes were waived for a company will less than 5 employees.

Yes, there would likely be some tweaks and changes, but the employment regulations we face today are essentially geared toward large industrialists taking advantage of workers. That`s not, in any way, the situation with micro businesses.

On the other hand, to suggest that the government should provide loans to small startups would do a couple of things. It would place a burden on taxpayers, already being burdened. It would increase the trillions and trillions of dollars of debt being shoved onto the kids of today as their responsibility for repayment.

Another aspect would be that many of these kinds of loans are either too restricted or have no restrictions. Not all business should be able to get a loan, particularly those that aren`t well thought out. Given that so many small businesses fail in the first year, what happens to the loan repayment? Does it just get vanished?

I think most of the economic trouble we`re seeing today comes from the underlying outlook of debt financing, evident in every sector of the economy and across the entire culture. What isn`t caused by this "buy on credit" mentality is caused by government interference in the markets.

I also think that there`s a need for a government to guard against abuses by economically strong organizations, to avoid slave wages, unsafe factories, and all the things we`ve learned over the past century. But there`s a total and fundamental difference between those large business entities and a micro business---a "mom and pop" store.

Think about how OSHA regulations impact a company with less than 10 employees, or employee tax withholding and medical insurance mandates. Look at all the penalties someone faces when they become self-employed, and the incentives in place for someone to be an employee of a large company.

All in all, government loans are causing more damage than they`re providing solutions. Painful as it may be, there are good reasons for companies to go out of business, restructure, or go bankrupt. Even the automotive industry. Bad management is bad management, and no amount of "help" from the Mommy State is ever going to produce good management from bad.