Congress Should Act To Save Small Business

 

It was refreshing to read Murray Weidenbaum (Economic Issues, March) on the small business loan subsidy. Taking a stand against the subsidy is like fighting motherhood and Santa Claus. But the subsidy is arbitrary, it opens doors to favoritism and corruption, and it creates political pressure for even more bureaucratic programs.

Unfortunately, Mr. Weidenbaum describes only one symptom of the deadly malaise consuming the small businessman and does not provide much in the way of prescriptions. Instead of creating programs like the loan subsidy, Congress should correct the economic misadventures of the past decade by turning over programs like the minimum wage and the Occupational Safety and Health Administration to the states, reducing regulations, and eliminating the cost-of-living legislation that dooms the American economy to perpetual inflation.

A substantial increase in the tax exemption on interest earned by savings accounts would help small business by making more funds available for capital investment. The Small Business Administration could then phase out the loan subsidy program as businesses acquire better access to adequate credit supplies.