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Biden: We Can't Recover All the Jobs Lost

jujuman13

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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.
 

justabubba

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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
 

samsmart

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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.

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.

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.
 

justabubba

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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
 
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RightinNYC

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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.
 

USA_1

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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.
 
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Barbbtx

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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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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?
 

Chappy

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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
[SIZE="+2"]T[/SIZE]he 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
 

justabubba

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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
 

justabubba

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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.
no one is advocating the government making loans to uncreditworthy applicants ... but to those who are deserving of credit based on their past financial performance
and you are correct. this is a smaller pie, now. but the way to grow that pie is to expand the number of people who can afford to buy goods and services, and we can only do that by expanding the number of employees ... preferably in the private sector
to do that, we must bolster small business' access to credit
 

apdst

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Biden: We Can't Recover All the Jobs Lost
Of course not. At no time was that ever the objective of the Obama administration.
 

USA_1

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no one is advocating the government making loans to uncreditworthy applicants ... but to those who are deserving of credit based on their past financial performance
and you are correct. this is a smaller pie, now. but the way to grow that pie is to expand the number of people who can afford to buy goods and services, and we can only do that by expanding the number of employees ... preferably in the private sector
to do that, we must bolster small business' access to credit
There is too much manufacturing capacity, retail outlets, and service companies for the level of demand now. Companies are cutting back and downsizing. Adding more competition to the mix will only hurt those barely hanging on. Strong companies are not having problems getting money. It's new start ups and companies on the edge that aren't getting what they want and maybe that's a good thing in the long run to weed out the weak businesses and strengthen the rest. Easy credit can do more damage than good. The last ten years have proven that.
 

RightinNYC

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What barriers would they remove that disincentivize lending to small businesses?
They could do something similar to what they did with the CRA. They could reduce limitations on leverage for loans that target small businesses. They could shift the tax incentives to make small business lending more profitable than other uses of capital.

Not saying that any of these are necessarily good ideas, but there are plenty of ways that the gov. could do it.
 

jujuman13

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Of course not. At no time was that ever the objective of the Obama administration.
Guess your understanding of his various speeches is radically different from most other folks understanding!
 

obvious Child

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They could do something similar to what they did with the CRA. They could reduce limitations on leverage for loans that target small businesses. They could shift the tax incentives to make small business lending more profitable than other uses of capital.

Not saying that any of these are necessarily good ideas, but there are plenty of ways that the gov. could do it.
I was about to say...

A better idea would be to simplify the SBA loan process. Apparently it takes years to get a basic loan from them.
 

USA_1

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I was about to say...

A better idea would be to simplify the SBA loan process. Apparently it takes years to get a basic loan from them.
Simplify the loan process? Good God, why do you think we're in this mess?
 

cpwill

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ah, and it was only a couple of months ago that he was predicing 500,000 jobs a month to be created this summer.

being a keynesian means never having to say you're sorry.
 

cpwill

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USA-1 said:
Hey, it worked for Reagan.
A) no, it didn't
B) if it does work, then my question to you is the same as my response to the war-is-good-for-the-economy crowd: why aren't we currently living high off the hog in the best times ever? with the amount of deficit spending we poured into the economy in the last few years we should be in the middle of boomtown.

Keyenesianism does not work. It didn't in the 30's, it didn't in the 70's, and it hasn't for the last two years since Bush 'decided to forgo his free market principles in order to save the free market'.
 

USA_1

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A) no, it didn't
B) if it does work, then my question to you is the same as my response to the war-is-good-for-the-economy crowd: why aren't we currently living high off the hog in the best times ever? with the amount of deficit spending we poured into the economy in the last few years we should be in the middle of boomtown.

Keyenesianism does not work. It didn't in the 30's, it didn't in the 70's, and it hasn't for the last two years since Bush 'decided to forgo his free market principles in order to save the free market'.
It works for a little while. Where would we be right now had we let AIG, GM and all those big banks fail? If we didn't extend unemployment benifits? If there had been zero stmulus? Hard to say if that spending saved us or just bought some time.

You do know that we thrived after the 30s 40s 70s and 80s.
 
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cpwill

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USA-1 said:
It works for a little while
in the sense that the drug addict 'cures' himself by getting another hit, yes.

Where would we be right now had we let AIG, GM and all those big banks fail?
better off. they would have gone into bankruptcy, which is fine.

If we didn't extend unemployment benifits
we would have fewer people unemployed

If there had been zero stmulus?
we would be much better off if we had not diverted those funds into useless pork projects, but instead let the market allocate them.

You do know that we thrived after the 30s 40s 70s and 80s.
You do know that was because we reduced federal spending and regulation after WWII, and then reduced tax rates and regulation in the 80's.

the notion that federal spending provides overal stimulus to the economy is riduculous; we should simply tax and deficit spend at 100% of GDP so that we can all be fabulously wealthy if that were the case.
 

USA_1

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in the sense that the drug addict 'cures' himself by getting another hit, yes.



better off. they would have gone into bankruptcy, which is fine.



we would have fewer people unemployed



we would be much better off if we had not diverted those funds into useless pork projects, but instead let the market allocate them.



You do know that was because we reduced federal spending and regulation after WWII, and then reduced tax rates and regulation in the 80's.

the notion that federal spending provides overal stimulus to the economy is riduculous; we should simply tax and deficit spend at 100% of GDP so that we can all be fabulously wealthy if that were the case.
That is all speculation. There is the same probablity that the nation could have fallen into a depression we could never recover from.
Massive government spending during and after WWII pulled us out of the Great Depression. After the war Americans paid higher taxes than any other time in history.
You seem to think capitalism and the free market system is perfect. It isn't. There are many countries where the government spends nothing.
 
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cpwill

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USA-1 said:
That is all speculation. There is the same probablity that the nation could have fallen into a depression we could never recover from.
history, common sense, and calculators teach otherwise.

Massive government spending during and after WWII pulled us out of the Great Depression. After the war Americans paid higher taxes than any other time in history.
which doesn't mean that there was higher government spending. Government spending dropped dramatically in the mid 1940's after the war was over. Government spending didn't pull us out of sh%t; the fact that the Wartime administration of FDR had a completely opposite approach to business as the "great depression" era administration plus the fact that truman rightly got rid of much of FDR's regulatory state did. Remember that we didn't fully recover until 1955.



but you are right we had taxes, we had to work off all that debt that we'd accumulated from deficit spending in the 30's and during the War. you will recall that the 30's and WWII are periods that are marked (as per your theory) as time periods of amazing economic advancement when people's standard of living increased dramatically. :roll:

You seem to think capitalism and the free market system is perfect.
nope. you need some basics for a free market to work. rule of law. enforcement of contracts. a relatively stable monetary system. a credible defense. there are 'problems of the commons, such as defense, police, pollution, etc. which the free market is ill-equipped to handle.

but for when it comes to how to grow an economy?

yeah. much better than the idea that the way to build wealth is to go into debt in order to fully fund your congresscritters latest hairbrained scheme.
 
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