By Bob Schall?Guest Commentary
In these times of near collapse of the banking industry and a steeply declining economy, I believe we need to look outside the box for ways to turn things around. I see issues with that being discussed by our leaders to solve our problems. Hoping to generate 3.5 million jobs with a $2 trillion investment costs over $570,000 per job. Giving money to compromised businesses may keep them in business for a while, but in the long run will most likely do little for the economy. Putting money into roads and other infrastructure cannot be implemented quickly. It takes years to obtain the environmental impact reports and complete the design work. Also, placing lots of money into this single sector will greatly expand that industry until the money is gone. Then, it will collapse, leaving behind a large debt and high inflation, and the jobs will also be gone. We need to do something that will immediately create lots of permanent jobs that will jump-start the economy and keep it going without continually feeding it with money.
Our economic problems stem from the banking problem that has created a serious credit crunch in this country. The banks aren”t lending to businesses and worst yet, businesses are having credit lines pulled and short term loans called. Every businessman is very aware of the difficulties they face today when trying to obtain a loan and this is especially true for new businesses in new technology. We all understand businesses need money and the domino effects from the lack of money are jobs are lost and the economy goes south.
I would like to suggest a possible direction that can be quickly implemented, can immediately stimulate all types of businesses and can create jobs that will not end when the program ends. All of this can be done without creating much inflation, without increasing our bureaucracy and without creating a huge debt for our future generations.
The solution to the country”s problems is to immediately infuse money to qualified USA businesses to enable them to hire people, purchase equipment, make products and get our economy moving again. The government and banks could simply partner in making loans available to qualified businesses. The government can put at least part of $2 trillion into a fund that will simply “match” business loans made by banks or venture capitalists. The lenders will be more inclined to loan the money if they were only putting up half of the amount needed and the government will be making loans, not giving money away. If a lender is willing to put their money into the business, that should qualify that business for the government part of the loan without strings attached. The government loan would simply be included as part of the bank loan and would be exactly like the bank loan in rates, terms and priority. The bank would handle interfacing with the business, receive all payments and simply send a check to the treasury for the government share of the loan. The cost of government oversight can be almost nothing. Long term, this could be a good source of income for the treasury and may even generate sufficient income to eliminate the personal and corporate income tax. If nothing else, it”s the United States of America investing in the future of the United States of America. I”m trying to think outside the box.
Bob Schall is a local realtor and developer. He owns Gateway Business Park.
