"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."