Normally Small Businesses Lead the Economy Out of Recession

The Small Business Administration reports that losses are rising. Last year, the SBA had to take back $2.1 billion in loans that it had guaranteed. This year, it looks like the total will be higher.

Normally, small businesses lead the economy out of recession. But this is no normal recession. This is a depression. And small businesses are getting crushed. An AP report says small businesses are not bouncing back as hoped.

Part of the phenomenon can be explained merely by the severity of the downturn. If this were a recession it would be a bad one – worse than any since the Great Depression. Consumers have rediscovered thrift. Households are cutting back. They do this by eliminating things that aren’t necessary. Small enterprises often provide things that people don’t really need to have.

Another explanation involves the feds’ response to the slump. Never before have they fought so hard to avoid a capitalist correction. But in their efforts to bailout Wall Street they not only ignore the side streets and back alleys where small businesses operate, they actually take away money from what might be called the small business economy in order to pay off their friends on Wall Street.

This is how you put the ‘great’ into a Great Depression – by depriving the small business sector of the capital and freedom it needs to innovate and grow.

Bill Bonner
for Markets and Money

Bill Bonner

Bill Bonner

Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America’s most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind Markets and Money.
Bill Bonner

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