Tuesday, February 9, 2016

Why Obama's business tax credit won't boost hiring: report

"52% of business owners simply don't want a loan... Only 4% reported financing as their top business problem"

Why Obama's business tax credit won't boost hiring: report


"Although Washington insists that reluctant lenders are holding back the economy, small business owners don't agree and see little benefit from the 'jobs bill,' " writes William Dunkelberg, Temple University-based economist for the National Federation of Independent Businesses, in a report for West Conshohocken based brokerage Boenning & Scattergood, citing NBIS surveys.

Tax cuts don't translate to business investments or job hires "unless prospects for a return improve. Even interest-free loans won't help, they must be repaid, and this requires... a high prospect of generating the cash needed to repay."

Cheap credit only turns into real investment "if excess reserves are borrowed and spent, and this has not happened to the ($40 trillion plus) in excess reserves now held by banks at the Fed and won't happen with the propsed $30 billion in new capital. A record 52% of small business owners simply don't want a loan... Only 4% reported financing as their top business problem."

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About this blog

PhillyDeals posts interviews, drafts and updates that Joseph N. DiStefano writes alongside his Sunday and Monday columns and ongoing articles about Philadelphia-area business.

DiStefano studied economics, history and a little engineering at Penn. He taught writing and research at St. Joe’s. He has written for the Inquirer since 1989, except when he left a few times to work at Bloomberg and elsewhere. He wrote the book Comcasted, and raised six kids with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com, 215.854.5194, @PhillyJoeD. Read his blog posts at http://www.philly.com/PhillyDeals and his Inquirer columns at http://www.philly.com/philly/columnists/joseph-distefano/. Bloomberg posts his items at NH BLG_PHILLYDEAL.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

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