If left unchecked, uncertainty will kill this recovery. The impending threat of new taxes, new healthcare rules, Cap-and-Trade, increased unemployment benefits, record-breaking deficits, and more regulation is stopping entrepreneurs and small businesses from hiring.
We all know that the recovery won't be real until hiring starts. When consumers are employed, the economy will swing upward. Consumer spending accounts for 70 percent of our economic activity, after all. But in order for consumer spending to rebound, consumers need jobs, and jobs will only come when small businesses start hiring again. The simple fact is that hiring won't happen until Washington eliminates the uncertainty that is in the air.
It's politically acceptable to say a lack of lending and liquidity are the big problems holding small business back. But I feel that today's announcement to release TARP money to small business misses the mark. True, a tight lending market is limiting capital investment, but the need for loans is not stopping hiring. The reality is that concerns about governmental interference and our crippling budget deficit are causing businesses to pause rather than to hire new employees.
The economy is not strong enough to allow businesses to go through the expense of hiring when politics might render that growth impossible, resulting in a fast round of layoffs that will in turn lead to severance payments and higher unemployment taxes.
The only thing worse than more taxes is threatening several different kinds of regulations, fees, and taxes. Owners will hedge against all of these, halting hiring altogether. When there is clarity on the depth of governmental interference in our lives, our biggest barrier to recovery will be gone. Until then, we'll have high unemployment, low consumer confidence, and a muted recovery at best.
Please, Washington, get out of the way and allow small business to fix this economy.