Small Business and Job Creation

Let me start by asking you a question. Would you put an addition onto your house if you had no idea how much it was going to cost? If you had no idea if the improvement to your house was going to be taxed at a different rate than the rest of the house? What if you didn't know if you were going to have to use a newer heating system and if you didn't you may end up paying a fine for everyday you didn't have the system in place? I think we would all agree the answer would be no.
This is the exact situation our small business owners are facing today. Due to the ever changing minds and focus of our administration, our small business owners can't really hire anyone, because who knows how much a new employee will cost tomorrow. Will the owner need to provide them with health benefits? Will they have to pay a higher tax on the increased productivity? What is the capitol gains tax going to look like on the investment gains they make?
With all of the uncertainty out there in the economy, it isn't hard to understand why business and job growth are not booming. Lastly, before we continue to vilify the banks, I would suggest we all talk to Bob Kelly, the CEO of Bank Of New York Mellon. In a recent interview he challenged people to do their research. Unemployment has almost doubled to over 10%, but bank lending is only down 10%, year over year. Banks would love to lend more money, that is there business. With spreads as they are, quality loans can create large profits, but there in lies the rub. Take a look at the open credit lines of small business owners. They are not using what is available already, let alone taking out new credit. In the face of the conditions I outlined above, it is easy to see why.
The same reasons I am not adding onto my house, as I had planned to, are the same reason these business owners are not expanding their businesses, too much uncertainty.