Obama, Stimulus II and Small Business

During his Saturday radio address to the nation President Obama let slip his administration’s real purpose for the stimulus legislation… which is to save government.

“It has already extended unemployment insurance and health insurance to those who have lost their jobs in this recession,” Obama, who is traveling today in Ghana, said in his weekly Saturday radio and Web address. “It has delivered $43 billion in tax relief to American working families and business.”

Were it not for the stimulus program, the president said, “state deficits would be nearly twice as large as they are now, resulting in tens of thousands of additional layoffs — layoffs that would affect police officers, teachers, and firefighters.”

Obama said the measure “was not designed to work in four months — it was designed to work over two years.”

Vice President Biden also chimed in:

“Remember, we’re only 140 days into this deal,” Biden said in a speech in Cincinnati. “It’s supposed to take 18 months.”

Balancing state budgets that are under stress is an excellent electoral strategy because it prepositions allies that can be counted on in 2012. What better way to get a state campaign operation energized than to relieve the budget pressure on the legislative and executive branches? And speaking of the two year time frame, why wasn’t that leisurely pace an issue when Congress passed the stimulus bill so fast they didn’t bother to read it?

So there you have it: the Obama administration bailed out state budgets first. The private sector, which actually produces income and wealth, is (optimistically) on the two year program. And who wants to bet that Stimulus II won’t include another large allowance check to state and local governments? So where does that leave small business? The Obama administration is already prepping the battlefield for that debate by offering up TARP funds to be used to assist small business:

The Obama administration is developing an initiative to take money from the $700 billion rescue program for the banking system and make it available to millions of small businesses, which officials say are essential to any economic recovery because they employ so many people, according to sources familiar with the plan.

This concept is beyond stupid. Why not just give the small business a tax cut? Declare a payroll tax holiday? Either would put cash in small business’ bank account today. Well, obviously those ideas won’t work because they would leave the relative operating freedom of small business in tact. Better for the government to use the TARP funds to mandate what type of cars small business buys (GM and Chrysler), where they bank (TARP banks), how they should treat union organizing efforts (EFCA), energy consumption (Cap & Trade), and health care benefits (ObamaCare).

An organized political opposition to this wholesale power grab by Obama/Pelosi/Reid better coalesce soon. It’s all slipping away.

Liberals Are Starting To Like The Flat Tax
Blogrolls are so 2004...