Wednesday, April 16, 2014
Inquirer Daily News

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."

Joseph N. DiStefano
About this blog

PhillyDeals posts raw drafts and updates of Joseph N. DiStefano's columns and stories about Philly-area finance, investment, commercial real estate, tech, hiring and public spending, which he's been writing since 1989, mostly for the Philadelphia Inquirer.

DiStefano studied economics, history and a little engineering at Penn, taught writing at St. Joe's, and has written the book Comcasted, more than a thousand columns, and thousands of articles, and raised six children with his wife, who is a saint.

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

Joseph N. DiStefano
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