He Really Did Say That

In a stunning statement in front of the House Small Business Committee, Treasury Secretary Tim Geithner said that taxes must be raised on small business so that "government would not have to shrink," and that ultimately such taxes would be good for growth. He held fast to this assertion even when confronted with the fact that small business creates most of the jobs in this country.


Any wonder why unemployment is still above 9% after two years of stimulus and Obamanomics.


I work with small businesses. I see their struggles up close and personal. In Illinois, they have been punished enough already. Over the past 4 years, small businesses have been savaged by recession, tough credit markets, and an explosion in the regulatory environment. Illinois, unlike New Jersey, chose not to ask for any sacrifice from its public sector unions that have a stranglehold on Illinois politicians, and, instead raised business and individual income taxes instead. Obamacare imposed new costs on businesses and promises even more costs and regulations. One CFO I spoke to told me, "We need a new plant, which I would expect would employ 250 people. But I'm just not going to do it yet. Not until the landscape changes."


And yet Geithner wants even more. After a 25% increase in government spending under the guise of stimulus (read "permanent growth"), he proposes to transfer yet more wealth from the private sector to the public sector, or else GOVERNMENT PROGRAMS WILL HAVE TO SHRINK.


Imagine that. Imagine a world with a smaller Department of Education, Department of Energy, or, even worse, a smaller EPA. All of these departments were granted whopping increases which set their baseline budgets even higher. Can anyone tell me succinctly what any of those departments will accomplish with any of those increases?


I can tell you what some of the businesses I work with will be able to do with those dollars if government doesn't confiscate them...... hire people, invest in new projects and new technologies, make promising acquisitions. In short, engage in those activities that create real wealth. Or simply retain an additional capital cushion so they won't have to go hat in hand to the bank.

The small businesses owners that have survived this tsunami have done so by making hard and sometimes painful decisions. And Mr. Geithner has determined that big government has better plans for those resources than they do.

Explain to me how that will be good for growth again, Mr. Geithner.