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"
"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."