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Thread: Biden: We Can't Recover All the Jobs Lost

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    Biden: We Can't Recover All the Jobs Lost

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    Biden: We Can't Recover All the Jobs Lost - Political Hotsheet - CBS News

    Quote(Vice President Joe Biden gave a stark assessment of the economy today, telling an audience of supporters, "there's no possibility to restore 8 million jobs lost in the Great Recession.")

    Have to give him credit for at last starting to tell the truth.

    Quote(Over the last five months, more than 500,000 private sector jobs were created.

    "We know that's not enough," the vice president said.)

    You correct on that Biden, barely covers the amount of claimants in one month.

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    Re: Biden: We Can't Recover All the Jobs Lost

    the Obama white house is still clueless about what is needed - yesterday!
    small business is the job generator of the US economy
    but small business is not receiving the loans it needs
    credit standards have tightened while balance sheets and operating statements have withered
    it costs a bank the same paperwork and servicing effort to make a $50,000 loan as it does to make a $50,000,000 loan
    as a result, the banks are going after the large borrowers - often overseas to fund our competition - instead of making loans to America's small businesses

    the white house has small business loan programs but they are largely ineffective, because those appointed politicians who are in charge of the programs have no understanding of the small business lending environment that needs to be better served

    if the SBA will begin writing direct loans from the remaining TARP funds, small business would again pull our economy out of this deep recession. if Obama does not figure it out within the next year, we will fall into a steep depression. put it on your calendar; see where we are trending economically next fourth of july. i hope you will be able to tell me i was wrong
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    Re: Biden: We Can't Recover All the Jobs Lost

    Quote Originally Posted by justabubba View Post
    the Obama white house is still clueless about what is needed - yesterday!
    small business is the job generator of the US economy
    but small business is not receiving the loans it needs
    credit standards have tightened while balance sheets and operating statements have withered
    it costs a bank the same paperwork and servicing effort to make a $50,000 loan as it does to make a $50,000,000 loan
    as a result, the banks are going after the large borrowers - often overseas to fund our competition - instead of making loans to America's small businesses
    This, to me, isn't a criticism of the government but rather the criticism of banks and loaning institutions. The government can't really control the amount of paperwork banks need to process loans. Unless you're talking about the U.S. government subsidizing that processing. Which would require a raise in taxes to pay for. Or adding a tax to processing loans for overseas borrowers. Which would inhibit free trade and possibly cause a trade war with other nations, which would further hurt American businesses in the long run.

    Quote Originally Posted by justabubba View Post
    the white house has small business loan programs but they are largely ineffective, because those appointed politicians who are in charge of the programs have no understanding of the small business lending environment that needs to be better served
    You're right. I'd rather the Small Business Administration be given more independence in supporting small businesses. I think that in the past it has been the tool of far too much abuse and corruption.

    Quote Originally Posted by justabubba View Post
    if the SBA will begin writing direct loans from the remaining TARP funds, small business would again pull our economy out of this deep recession. if Obama does not figure it out within the next year, we will fall into a steep depression. put it on your calendar; see where we are trending economically next fourth of july. i hope you will be able to tell me i was wrong
    You're right in that more money needs to go directly to small businesses. However, the key is getting the banks and loaning institutions to give that money and credit out. I don't know the best way to get that done.

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    Re: Biden: We Can't Recover All the Jobs Lost

    Quote Originally Posted by samsmart View Post
    This, to me, isn't a criticism of the government but rather the criticism of banks and loaning institutions. The government can't really control the amount of paperwork banks need to process loans. Unless you're talking about the U.S. government subsidizing that processing. Which would require a raise in taxes to pay for. Or adding a tax to processing loans for overseas borrowers. Which would inhibit free trade and possibly cause a trade war with other nations, which would further hurt American businesses in the long run.



    You're right. I'd rather the Small Business Administration be given more independence in supporting small businesses. I think that in the past it has been the tool of far too much abuse and corruption.



    You're right in that more money needs to go directly to small businesses. However, the key is getting the banks and loaning institutions to give that money and credit out. I don't know the best way to get that done.
    during the ronnie raygun regime, after the economic crisis was subsiding, the white house capitulated to banking interests and quit making direct loans to US small business. the reason was because the banks opposed SBA making loans which should have been made available thru the private sector
    now, that premise sounds reasonable
    - if you did not also know that to qualify for a direct loan from SBA you first had to seek the loan from a commercial lender (actually two, in urban areas). only if credit was not available elsewhere could the SBA make the direct loans
    we see today that the credit is not being made available elsewhere but sba is no longer positioned to make direct loans to the small business sector

    so the republican president ****canned the sba's loan making capacity by instead having the agency underwrite loan guaranties for credits that met sba's loan guaranty criteria
    that is not a bad practice, of itself, as the federal dollars are thereby leveraged to many more small businesses that need it, to allow banks to make loans to the marginal credits
    but banking has gone global and there are lots of foreign interests looking for large loans
    as the economy of scale works against smaller loans and because the banks spend out their available capital with tightened reserve requirements these days, there is little left for small businesses to borrow. even the more creditworthy

    sba should fund the direct lending (out of the unspent TARP monies) and allow the banks to buy any of the loans the sba books, now or later, for a nominal amount in excess of par. (the excess is to recover the agency's expense in originally processing the loan)
    with that mechanism the lenders can no longer complain that sba is absorbing the small business loan situations it would otherwise lend to. and it will ramp up small business spending and hiring. the economic multiplier effect ranges from 4X to 8X of the cost of the job from borrowed funds as the wages get recycled into the economy

    during the clinton years the sba was found to be a net revenue generator to the federal coffers. taxes paid by businesses formed, businesses expanded, and added employees far offset the cost of the agency's programs to the taxpayer
    Last edited by justabubba; 06-26-10 at 08:57 PM.
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    Re: Biden: We Can't Recover All the Jobs Lost

    Quote Originally Posted by samsmart View Post
    This, to me, isn't a criticism of the government but rather the criticism of banks and loaning institutions. The government can't really control the amount of paperwork banks need to process loans.

    ...

    You're right in that more money needs to go directly to small businesses. However, the key is getting the banks and loaning institutions to give that money and credit out. I don't know the best way to get that done.
    I don't think it's that the government can't do anything about this, I think it's that it hasn't. The government's decisions on what to regulate and what not to regulate has a substantial impact on the way that banks act. If the government really wanted to incentivize small business lending, it could do so by creating financial incentives for the banks to do so or by removing barriers that disincentivize it.

    I'm not saying that the government is wrong in what it's doing, but simply that the government is by far the largest player in terms of affecting financial behaviors.
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    Re: Biden: We Can't Recover All the Jobs Lost

    The truth is there is not enough demand to support any more small business. Small businesses have been going belly up in huge numbers not because of lack of loans but lack of demand for their products. There were too many small businesses. The market can only support so many. Throwing more money at the problem and increasing their debt load will not solve any problem. You can not blame banks for being careful since making risky loans got us in the mess in the first place. That along with too much government intervention in free markets.
    Last edited by USA_1; 06-26-10 at 09:03 PM.
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    Re: Biden: We Can't Recover All the Jobs Lost

    I really don't think it has that much to do with loans not being given. I think it's mostly the uncertainty of what this administration is going to next. The HC bill, crap and tax, vat tax etc. Cramming through the 2,000 pg. financial reform bill in the middle of the night and Harry saying "now we'll find out how it works." This bill is going to affect every single American and we have to wait and see how? This administration really comes across as anti-business, so it's pretty scary to those wanting to start a business or expand the one they have.

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    Re: Biden: We Can't Recover All the Jobs Lost

    Quote Originally Posted by RightinNYC View Post
    I don't think it's that the government can't do anything about this, I think it's that it hasn't. The government's decisions on what to regulate and what not to regulate has a substantial impact on the way that banks act. If the government really wanted to incentivize small business lending, it could do so by creating financial incentives for the banks to do so or by removing barriers that disincentivize it.

    I'm not saying that the government is wrong in what it's doing, but simply that the government is by far the largest player in terms of affecting financial behaviors.
    What barriers would they remove that disincentivize lending to small businesses?

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    Re: Biden: We Can't Recover All the Jobs Lost

    Excerpted from “House Passes Bid to Boost Small-Business Loans” By MARTIN VAUGHAN, The Wall Street Journal, JUNE 17, 2010, 7:40 P.M. ET
    The U.S. House approved legislation Thursday to create a $30 billion fund to boost lending to small businesses through community banks.

    The vote was 241-182.

    The bill will now be combined with a $3.5 billion package of tax cuts directed at small businesses, which the House passed earlier this week and sent to the Senate for approval. …
    You think it has a prayer in the Senate? Let's put it this way: House Republicans voted 169-to-3 against this bill. So one would expect it will be filibustered (like everything else) by the Senate Republicans and that will be the end of that.

    See also: http://www.govtrack.us/congress/vote.xpd?vote=h2010-375
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    Re: Biden: We Can't Recover All the Jobs Lost

    Quote Originally Posted by Barbbtx View Post
    I really don't think it has that much to do with loans not being given. I think it's mostly the uncertainty of what this administration is going to next. The HC bill, crap and tax, vat tax etc. Cramming through the 2,000 pg. financial reform bill in the middle of the night and Harry saying "now we'll find out how it works." This bill is going to affect every single American and we have to wait and see how? This administration really comes across as anti-business, so it's pretty scary to those wanting to start a business or expand the one they have.
    again, being focused on small business (which is not the specific thread topic, i acknowledge), the health care program is a good thing for that sector. small businesses cannot get the discounted rates large businesses negotiate. one of the advantages large businesses have when hiring and retaining key employees is their (near) unique ability to offer health coverage. small businesses will now be better able to compete for the same employees

    the stuff you mentioned is not a huge issue with small businesses. because they are small they are nible and can handle the challenges of change quicker and better than large firms with their bureaucracies that struggle with change

    and i can assure you, access to loan capital is one of the huge concerns of the small business sector these days. many have been hit by failing businesses as clients. and those those failing businesses represent unpaid receivables for the remaining small businesses. it is not unlike retailers being hammered by a buying public which is now without much of the credit it formerly possessed. without access to adequate credit to weather this storm, the business sector will continue to shed employees
    we are negotiating about dividing a pizza and in the meantime israel is eating it
    once you're over the hill you begin to pick up speed

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