The legislation Obama is promoting would ease the terms for loans guaranteed by the Small Business Administration, providing $12 billion in tax breaks and issuing grants to states to provide business loans.

It would also provide $30 billion to banks with less than $10 billion in assets to encourage lending to small businesses.


First, the adminstration also wants small business to borrow money from community banks and government programs, as indicated by the quote above.  Then in 2011 it wants small business to pay more taxes by letting the Bush-era tax cuts expire.  The cuts expire on January 1, 2011.  This will hit many small businesses because they pay taxes using personal income tax rates. 

Take on more debt now and pay more taxes in 2011.  How else can you interpret the administration’s policy?  This is reckless corporate finance.