Wednesday, January 26, 2011

the ignorance of the left is killing small business

All good intentions aside, when the leaders on the left can justify added cost and are cavalier of the negative effects on a small businesses bottom line, the results are devastating. When you do not understand the cost of doing business, you are ill prepared to understand the negative effects of fee and tax increases. When you have no idea of purchasing power and the unit cost of goods sold, much of our tax and fee system that we have developed in Nevada has caused the high unemployment, high bankruptcy rate, and the high foreclosure rates that we now see. Small business is at a disadvantage and cannot always increase its prices to compete, when the government adds cost to its operation, many times the owner just makes less. This is the big reason we are in the economic state that we find ourselves, all due to a refusal to change the what and the how our state government spends money. The sad truth is that it is the size of government and the taxes needed to maintain this Government that is the cause of our problems here in Nevada. We have leaders that see a need and figure that the economy can withstand an increase of doing business to pay for these added services. Well we are seeing that those days are over. The services are still needed but we have done damage to the local economy that used to pay for these services. It is now as much about taxation policy as it is about the size and scope of our government. We have added costs to local business by taxes but more so by fees and regulation. How we used to make money in the past can no longer support this size of government.

The only way to get out of this mess is to prioritize and begin to cut. We need to understand that we cannot fix all ills and that the public sector cure can be more damaging than the ill itself. Benjamin Franklin once said we should not make the poor too comfortable in their poverty. Well with the entire social engineering that we have done over the last forty years we have done just that. All of this social engineering at the expense of the economic engine of this state and nation. We have allowed big business to protect itself from local competition through regulations that create a glass ceiling for the local business person. Many business models now do not work and people are finding assets becoming liabilities.

I stated that we need to return to the cost and fee structure of 2000, before 9/11 and the growth of government that we have seen. People think that would be too drastic, I say not. Back in 2000 we had an economy that supported schools, police and fire. We had an economy that was growing, although I will agree that we had problems. The mortgage crisis was growing with the federal government allowing for far too many people to buy a home that could not afford it. Why we went away from 20% down and the ability to pay the mortgage is beyond me. That decision was political as much as it was short term greed from a few on Wall Street.

We can come back, but we need to downsize our government, and allow us to work again.