Monday, July 27, 2009

Businesses Going Down the Tubes With Obamanomics

So far many businesses are not feeling that hope and change thing yet. The only change many are going through is putting up a Going Out of Business sign.
As the effects of the economic collapse began pouring down Main Street, the government last year was left holding a record $2.1 billion in write-offs of small business loans it had guaranteed.

Officials expect the number of defaults to rise as the nation continues to climb out of the recession.

Records obtained under the federal Freedom of Information Act show the public is paying to offset bank losses on small business loans across the country, from a convenience story in the tiny Canadian border town of Houlton, Maine, to a graphic arts design company on the island of Hawaii, more than 5,000 miles away.

Despite having loans written off, little companies such as Caffe Sportivo, an espresso shop and small gym in Redwood City, Calif., are barely scraping by.

"I just couldn't make any payments. I was barely making rent or payroll," owner Chris Sakelarios said on a recent afternoon when her cafe stood empty except for two patrons who read as they sipped coffee. "The same as everyone else. We're in a hovering pattern."
And along comes Obama to raise taxes and increase government handouts. This is not going to get a whole lot better any time soon. The market is coming back a bit because things were a bit oversold. But unless the general public gains a whole lot of confidence in the economy real soon, those with income will continue to save up and wait to see how much Washington plays around with things.

For those who are too young to remember the dreadful Carter years, we are going to be entering a period of economic stagnation with a continuing high unemployment and a growing inflation as big government borrows more and more to pay for the hand outs to their voting base.

No comments: