The Challenges Facing Small Business Today

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The current world economy is similar to the King of the Beasts – the Lion.  The lion holds back for nobody. The current world economy is like a lion out of control and nobody can tame it. From the USA, China to Europe through to Japan, the respective administrations for each country seek an answer to their dilemma! How do they spur the economy on and simultaneously create the much needed employment that their citizens no longer enjoy. Until these jobs are re-created, no country or their residents will be satisfied. Rightly so!

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The Japanese administration has tried for the last 20 years to get their economy going. They have operated under austerity, inflation reducing policies and inflation increasing policies. They have tried nearly every fiscal trick to get their economy moving. Today, their Quantitative Easing policy appears to be working…but oh wait, their markets are re-coiling. Ironically, at no time have they managed to create the corresponding national work force to back up their policies. Paper money has created an elephant that cannot move. Currently the USA and Europe have embarked on the same policies as Japan. The affect has been similar in each case… no further growth, just inflated numbers on their respective stock exchanges that will deflate when  Quantitative Easing stops. The QE policies in the USA have inflated the S & P 500 to the point that stocks would need to reduce by 40% to again become attractive investments.

In Europe the greater economy is weighted down under the years of social spending with the lack of corresponding job creation. France is in the grips of recession and facing a financial disaster- unless they cut social spending. Social spending is popular and wins votes…for some time. The current Prime Minister, Francois Hollande has seen his popularity polls drop to 28%. Nearly 68% of the French population no longer has any trust in him. Germany has recently had its 2013 growth forecast cut by the IMF from 0.6% to 0.3%. Hardly much room to grow and help the Eurozone out of the difficult position it finds itself in. Spain, Greece, Cypress and Italy find themselves in deep depression and France is running hard on their heels. Europe really is a house of cards as the ECB pumps money into the individual European economies and they deteriorate faster than the inflow.

Turning our attention to the United States. Our economy limps along with the Fed printing money to the tune of $84 billion per month. The NYSE is at a near all-time high. Quantitative Easing (to infinity) is really not creating jobs or developing the work force. What America needs is growth in new jobs. While many will argue that the number of part-time jobs are up, this is mainly due to employers actions in response to Obamacare, where many companies have moved full time workers from 30 hour weeks down to 26+ hour weeks and thus avoided the medical costs associated with Obamacare.  Tax receipts for Q1 surprised everyone. True, the Q1 contains everyone’s IRS annual payments, but what it does display is that the US economy, given half the chance to take off, can handle the much required shrinking of the national debt.

The truth is the USA needs jobs, and needs jobs urgently. The booming growth of the oil industry will make a significant difference to the economy. Texas is starting to make and feel the difference. The time has come for the current administration to develop energy and immigration policies, lay aside political agendas, address the excessive profiteering and cozy arrangements of the large insurance and pharmaceutical industries, and build the economy. Taxes play an important role in growth and the corporate tax policy needs a complete overhaul. The economy needs a quick start.  This is where small businesses come into play. The economy of the USA is built around small business. Let’s build for the future by growing our small business sector. Taxes and incentives should be geared towards small business growth. The Affordable Health Care Act, a tax, is certainly in the process of slowing the economy down. A solution should be developed, to help everyone. Those in need of health care should have access to health care. Hopefully we soon find a group of politicians who care about the future of the USA ahead of their political agendas. Developing policies that build the fabric of the American society – Small Business – will go a long way to restoring the USA to its former glory.