On October 21st, the Obama administration announced that some of the TARP (bailout) money was going to be funneled to the SBA (Small Business Administration) to use for making small-business loans. As usual, the politician’s answer to any problem is to throw more taxpayer dollars at the problem, as if Uncle Sam showing up with a checkbook will make everything all better.

So in effect, their solution is to tax the “rich” (meaning: the small businesses and their owners), then when they are having trouble with money to run their business, Uncle Sam will loan them their own money back to them… with interest. (Isn’t this how the Mob operates?) But it’s a game of never-ending losses for the business. For every dollar the Government takes in taxes, half of that dollar is lost to The System. Then they loan that 50¢ back out, expect 55¢ back, and if the company makes more money because of that loan… they take more of that, too. So in the end, the business owner is probably out twice as much money as they would have been if they didn’t take the loan in the first place, and half of that money is lost in just running The System.

There is a better way to spur small businesses: Cut the taxes. When businesses pay less in taxes, they keep more of what they earn. When they keep more of what they earn, they can in turn spend that money on salaries, benefits (like healthcare!), and capital like equipment. But that will never happen, because that makes too much Common Sense.

…why not spend the money more wisely? If you’re going to spend my hard-earned taxpayer dollars anyway, spend them in a way that might actually make a difference:

Spend $2000 and buy used cars for eligible applicants. (i.e. single parents.) Give them a $500 voucher for car insurance that can be used at any car insurance company, and a $400 gas card that can be used at any gas station. (And by “any” we do mean “any”.) Pay for their vehicle registration for 2 years (about $100.) (more…)