Karen Mills the current head of the SBA has announced that she will soon step down.
For those of you that do not know the SBA (Small Business Administration) is the U.S. government agency responsible for helping small business grow, with the assistance of government programs, grants, and expertise. As it has happened with so many other governmental organizations, the SBA has become a blotted bureaucracy, with convoluted processes, and a focus on canned presentations and documents on their web site with. During the last few years the agency has managed to provide little or no practical use to small business trying to get of the ground, and instead of fighting to ease the burden on small business it seems to add to the number of tax wasting agencies that live of the blood of the same people it is supposed to be helping.
I recognize that attempting to help any and all small business get of the ground could be a daunting task for anybody, but it is actually the only reason to be for the SBA, and the one they have failed miserably at. Today it is as difficult to launch a small business as it was 20 years ago (or probably more due to the still ongoing collapse of the U.S. economy), and a visit to the SBA does not makes it any easier. One quick example is the SBA policy on financial assistance, where quoting directly from their web site:
SBA does not provide grants for starting and expanding a business.
Let’s hope that with the announced change, the administration chooses a new department head that either has some actual experience as a small business owner (and small does not means multi-million dollar venture capital funded silicon valley enterprise). Someone that has invested their own hard earned cash just to hear at the end of the year that they can’t deduct their business expenses on their standard tax deductions just because they had a high salary. Someone who understands that having to spend thousands on attorneys and accountants to fill in the convoluted government forms actually discourages people from attempting to reach the american dream by launching their own business.
Small business and the middle class could be considered the foundation of any country economic development. Globalization has shown that a growing and strong middle class has been one of the fundamental factors in the recent economic growth of China, Brazil, India, Russia, and many other countries in Latin America and Asia. At the same time weakening the middle class and small business trough increased bureaucracy and taxation, could be considered the primary reason the economies of the U.S. and Europe have been on decline for the last 20 years. Also weakening the middle class and destroying the small business community through forced socialization and the nationalization of industries as it happened in Cuba, Venezuela, North Korea, and other countries has also shown that it automatically destroys the economy of any country, and it is not an avenue for progress. It is time for governments (right, center, or left) all over the world start to realize that, and start developing and implementing plans to follow the example of the BRIC countries and strengthen the middle class and small business on their countries if they want to remain competitive in the world markets.
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- SBA Lending Marches On Post-Sequester, But Anxieties Linger (entrepreneur.com)
- SBA Budget Whacked $92 Million By Sequestration (entrepreneur.com)
- Sequestration Cuts $92 Million from the SBA’s Budget (businessweek.com)
- What the heck should we do with the SBA (inc.com)