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NEWS: 7/22/11

7/22/11 – July Newsletter - By Patrica Hhenner

Small Business's Facing More Troubles

Troubles are continuing to come in for small businesses. The latest trouble is in the form of taxes. As tax bills come in more and more businesses are finding themselves in a difficult situation to pay these overdue taxes. As the IRS has begun to automate collections and liens, causing an increase in liens of over 500% over the past decade. (Eckblad, para 6)

As businesses face difficulty in paying taxes many of tried to turning to banks as they had in the past, however as banks are becoming tighter with lending practices businesses find it harder and harder to find money sources. "We cannot fund a business that has a tax lien because they're violating the law," says Alex Dang, a business development officer at Opportunity Fund, a small-business lender in San Jose, Calif.

For now the only action is political in an effort against liens against default taxpayers. It is in this effort that small businesses are attempting to be able gain additional ways to pay taxes without the burden of the lien on them.

Eckblad, Marshall. "Tax Lien News." Tax Liens | Tax Sale Properties | Taxliens.com. Wall Street Journal. Web. 15 June 2011. http://www.taxliens.com/news/tax-lien-news.html.

More Stimulus??

As economic growth as slowed there is at least one person calling for more government stimulus. Larry Summers, former economic advisor to President Obama, is calling for more than $200 billion more to be spent by the government in yet another stimulus package.

Summers is calling for this stimulus to avoid a double dip recession. Stating we avoided a depression in 08/09 with aggressive action and if the government does not act again we will not be lucky to avoid a major depression this time around.

Many argue against yet another stimulus pointing to debates whether the first stimulus actually worked or not. As well as belief that the more severe problem to be dealt with is the nation's long looming debt. While Summers calls for this to be a secondary problem to a slowing economy many believe getting the debt under control must be top priority.

Whether one agrees with Summers or not all can agree we can not afford a double dip in this upcoming year. The government must focus on finding a way to keep our economy going without another stimulus package only furthering our debt crisis.

Isidore, Chris. "Summers: More Stimulus Needed to Avoid 'Lost Decade' - Yahoo! Finance." Yahoo! Finance - Business Finance, Stock Market, Quotes, News. Wall Street Journal, 13 June 2011. Web. 15 June 2011. http://finance.yahoo.com/news/Summers-More-stimulus-needed-cnnm-3405855728.html?x=0.

Banks to Cause 2nd Depression?

Dank Bove, banking analyst is calling for the Federal Reserve to stop putting pressure on banks to raise new capital. Stating this adding pressure might lead to a 2nd Depression. He also calls the Fed's quantitative easing program a "miserable failure" for it merely raised asset prices but put no new money into economy. Bove points to the fact that the money from the purchases of bonds is simply just sitting the reserves to meet requirements not being active in the market.

While Bove called the Fed's Troubled Asset Relief Program one of the most successful programs in history of the Federal Reserve he is not sparing them this time. Stating banks are being handcuffed by restrictions instead of simply being allowed to grow. While many argue this restrictions are necessary putting much blame of the recession at the hands of the banks.

Simply is the money better off in the market, in the economy rather than in the Federal Reserve? According to Bove it is stating, "The money is there it simply needs to be made available."

Cox, Jeff. "News Headlines." CNBC Mobile Home. CNBC, 7 June 2011. Web. 15 June 2011. http://www.cnbc.com/id/43313319?__source=yahoo|headline|other|text|.

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