There is draft legislation in Washington that could rev up the economy and solve all our problems. Unfortunately, it’s not getting anywhere.
It’s the jobs, stupid
“It’s the economy, stupid.” How is it that no-one remembers this simple mantra? “It’s the jobs, stupid!”
After the largest fiscal stimulus in our country’s history, and interest rates so low we’re practically giving money away–the unemployment remains structurally set at a new, higher level of 7.6%, and after 2Q 2013 GDP growth revised down to an anemic 1.3%!
An antidote for our economic anemia
If we really want to fix the economy, create new jobs, and get the country moving again, then I’ll let you in on a little secret:
“Small Businesses and Entrepreneurs”
A couple years ago, the Marion Ewing Kauffman Foundation, one of most respected voices of entrepreneurship in the country, proposed a solution that could mitigate the problem of structural unemployment. It could solve the jobs crisis and the housing crisis in one fell swoop.
Immigrants found companies at higher rates than native-born Americans
The Kaufmann Foundation’s research has shown that before the financial crisis and the great recession, “U.S. job and output growth was driven by the formation of new firms, or startups.” Moreover, “immigrants found companies here at greater rates than native-born Americans do, and are disproportionately successful in starting successful high-tech ﬁrms.”
Spur the economy and create more jobs
The Kauffman Foundation’s “Startup Act” is draft legislation that is far more relevant to spurring the economy and creating jobs than anything else any of our politicians–from either side of the aisle–have dreamed up.
According to the Kauffman Foundation, the Startup Act proposes some of the following:
- Welcome foreign entrepreneurs to the United Sates who desire to build scalable companies– (1) offer Entrepreneurs’ Visas based on capital they bring for startups or revenue they already generate though a business operating in the US, and (2) grant green cards to foreign students when they receive their STEM degrees from U.S. universities.
- Finance scalable firms and their growth – (1) create capital gains tax exemptions for long-held start-up capital and (2) create tax incentives for start-up operating capital.
- Accelerate the formation and commercialization of new ideas – (1) create incentives for the patent office to speed patents and reduce the backlog of patent applications, and (2) create incentives and greater licensing freedom for academic innovators.
- Remove barriers to formation and growth of scalable businesses – (1) create sunsets for all major rules that are unduly burdensome to small business, and (2) create new common-sense standards for regulations.
More high growth companies and a continuing stream of new ideas
“A strong, sustained U.S. recovery will need more high-growth companies, a continuing stream of new ideas capable of being commercialized, fewer roadblocks to launch and grow startups, and low-cost capital available to finance them”, the Foundation asserts.
In short, The Startup Act is brilliant. A large influx of foreign entrepreneurs would (1) create jobs and (2) stimulate demand for housing— and it would help create an environment where small business owners and entrepreneurs can thrive, then we get a balanced budget and 4% unemployment.
Working for the common good
That is, of course, if our representatives in congress are willing to put the needs of the country above ad-hominem and name-calling politics. It means moving beyond the sound-byte, and working together to solve our common problems for our common good.
If and when we’re ready to do that, then here is the answer:
” Small businesses and Entrepreneurs.”
If you’d like to… look up your senator or representative below, and remind them that its small businesses and entrepreneurs that are going to fix this mess–all of us working together. Ask them why The Startup Act has failed so far.
Why do you think the Startup Act has failed so far? Is there anything that we as small business people can do to move it forward?