Small Business Not Benefitting From Stimulus

By Tim Cameron
American Solutions
December 9, 2009

Large government spending programs often fail to benefit small businesses, and the owners of small businesses clearly recognize the stimulus will likely fail to benefit them as well. In an online survey of over 1,500 small business owners an astounding 99% of respondents said that their business has not “received any funding or contracts through President Obama’s stimulus plan.”

While the results are heavily lopsided, the findings should not be shocking to those familiar with way Washington politics work. Small businesses don’t typically have high paid lobbyists on their payroll, putting them a distinct disadvantage when it comes to competing with big businesses and government contractors for stimulus money. In fact, only 4% of business owners responding to our poll said they plan on applying for any stimulus money.

These results underscore the fundamental reasons why a “second stimulus” will not benefit most small business owners. Not only are they at a disadvantage when it comes to applying for and competing for government contracts, but also that these funds will take months to distribute to those lucky few businesses that are actually able to win these government contracts. It also makes clear why tax cuts are fundamentally more powerfully than massive government spending. A payroll tax reduction would benefit 100% of small business owners, not to mention their employees, by giving them additional capital starting as soon as the first pay period after that tax cut would be enacted. This is a stark contrast to the less than one percent of respondents who have received some funding or contracts through the stimulus plan almost a year after it passed.

In addition to not benefitting from the stimulus, an overwhelming majority of small business owners believe two of the President’s top agenda items (healthcare and climate change legislation) will be detrimental to the economy. Just one percent of small business said that Obama’s healthcare plan would create jobs if passed while only two percent of small business owners thought an energy tax would create jobs.

It has become very apparent that there is a fundamental disconnect about how to turnaround our economy between the Obama administration and the small business owners who are creating private sector jobs. Maybe it’s time for the administration to stop growing government and start taking job creators’ opinions seriously.

To see more results from our small business survey please click here.

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