Neither Romney-Ryan or Obama-Biden have all the answers. But now we have two presidential tickets addressing the most important issue to small business owners: the economy.
Flickr/ Tony Alter
Thank you, Mitt Romney, for choosing Paul Ryan as your running mate. And thank you, President Obama, for saying this: "Paul Ryan is a good and decent man; he is a family man. He is an articulate spokesman for Governor Romney's vision. But it is a vision that I fundamentally disagree with." Thank you.
Sure, over the next few months there will be all sorts of disrespectful things said by both sides about the other. Most of it will come from the talkers on cable TV. Representative Ryan will be accused of attacking the poor, being insensitive to the elderly, and once having an affair with Ayn Rand's second cousin. The President will be accused of dishonesty, populist beliefs, fear mongering, and new revelations by Donald Trump will prove, beyond a doubt, that Obama was actually born in Atlantis and not Hawaii, as originally claimed. Like many voters, I find all this disrespectful.
That's probably because I get so little respect nowadays. My kids don't want to hear what I have to say, unless it involves giving them money. My customers continually abuse their payment terms. My vendors frequently miss delivery dates. I wait on hold for 30 minutes while an airline makes a minor change to my ticket...and then charges me $150. This is my life. But the choice of Representative Ryan, and the President's statement gives me some hope.
This is an important election year. And both candidates have now framed the election around the most important topic to business owners like me: the economy. They are drawing their lines. They are proposing two different approaches to solving our economic problems. They are giving us choices. Hopefully they'll continue to stay focused on the economy (rather than negative name calling), and do their best to give us good information, so we can make the right choice.
My business, though profitable, is still not growing. The recession has been tough. I haven't added an employee in four years. My people could be much busier. Like many business owners I'm frustrated at the lack of demand. I'm frustrated by the slow growth of our economy. I'm frustrated by the scratch on the back of my Nissan that no one seems able to explain. I'm frustrated by the prospect of rising deficits and our huge national debt that no one seems able to address.
Do Romney-Ryan or Obama-Biden have all the answers? Of course not. Economists can't even agree on the answers. Are these politicians smart people? Yes, I believe so. But then again the producers of Battleship are smart people and looked what happened to them. The most important thing here is that, with the selection of Ryan, we've now identified the biggest issue: the economy. And we now have two candidates who are presenting two different plans to address the economic issues that are of most concern to small business owners like me: slow growth and rising deficits.
Whichever candidate is elected, his plan for improving the economy will directly impact my company. But which plan makes more sense? How will that plan impact a small business like mine? Here's a comparison so far:
To grow our economy, Romney and Ryan want to cut taxes. The President disagrees. He believes that more government spending will stimulate growth. Romney-Ryan look to past administrations like Reagan's and Bush's first term, when times were good, Bon Jovi rocked, and the economy was booming. They say that low tax rates were a big part of the reason. The President looks at the days of Roosevelt and Lyndon Johnson, when the government's funding of infrastructure projects and welfare reform helped to bring the country out of the Depression, and--in Johnson's case of Johnson--significantly added to the country's gross domestic product. My business needs more growth. I need more customers. I need people to feel more comfortable upgrading systems and buying more software and services from my firm. Which candidate's plan will accomplish this? This affects me.
For years as the House budget leader, Ryan has personified the opposition's fight against the President's proposals. He has warned that the President's spending would continue to increase deficits and our national debt. He has presented his plans for balancing the budget, including tax decreases and significant cuts in programs (health care reform, for example) that directly contrast with the President's ideas. The President has fought Ryan each year with nothing more to show than a stalemate in Congress. He has not had a budget passed since 2009. And so the government continues to spend money without a plan. And deficits continue to rise. Right now money is flowing into the U.S. even at near zero level interest rates because, compared to the rest of the world, we're still (if you can believe it) the safest place to invest. But it will be a problem if our government can't agree on a reasonable plan to reduce our annual deficits and pay down our national debt. Because as Europe firms up its balance sheet and countries like China and India grow stronger, our investors may not feel as comfy with our bonds and treasury bills. With more risk comes more interest. And less value for our currency. I borrow money. I buy materials overseas, and have customers who do too. This affects my business.
Both Romney and Ryan are proposing significant decreases in income tax rates for all income levels. They are proposing lower taxes on dividends and capital gains than the President is. They are pushing a zero estate tax rate. Many economists agree with this plan. And many scratch their heads at the math and wonder how the country will pay for all these tax decreases. The President wants taxes to increase, particularly on the wealthy. He wants those making more than $200,000 a year to "pay their fair share." He's doing what many of us running small businesses would do: searching for new revenue to offset rising costs. Will his idea work? Or will higher taxes constrict my spending? Taking together the state, local, and federal government, I'm already paying out nearly 40% of my income in some form of taxes. And that doesn't include the fees I pay to my cable company. Whether rates go up or down hits me right in the pocketbook. This affects my business.
About two-thirds of our government's spending goes toward defense or some type of insurance (social security, Medicare, Medicaid). The President wants to cut defense spending and not make any changes to insurance spending. He feels that the recently-passed health care reform bill will, over the longterm, reduce some insurance costs. So he feels that these changes, coupled with tax increases, will enable us to pay down our debts while, for the most part, still keeping the insurance plans in place. Romney-Ryan attack entitlements. Ryan has proposed giving block grants to the states and letting them be responsible for paying Medicaid. He wants seniors to be given subsidy checks for Medicare, so they can decide how to spend. Will these proposals wind up requiring more to be paid in for health expenses? Will new taxes need to be imposed to rescue these systems? Will this increase the demand for "early bird" dinners in Boca? Is health care reform the answer? These decisions will affect me and my employees.
We'll be hearing lots of debates on these issues over the next few months. That's a good thing. So thank you Governor Romney. With the selection of Representative Ryan, you've made the economy your No. 1 issue. (You've also created a pretty darn handsome looking couple.) Oh, and thank you President Obama. You have respectfully agreed to take on the Republican ticket with your own vision of how you would address our economic problems. Small business owners appreciate the respectful debate on these fundamental issues. And even though I wish I looked more like Paul Ryan and less like George Costanza, even I appreciate this opportunity. I appreciate the respect. I get so little of it nowadays.
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Gene Marks is a columnist, author, and small-business owner. He oversees the Marks Group, a 10-person technology consultancy to small and medium-size businesses. A certified public accountant, Marks has also worked in the entrepreneurial services arm of KPMG. He writes for The New York Times, Forbes, and The Huffington Post. @genemarks