It has become painfully evident over the past two years of total Democrat control of Washington that the last thing America needs is one more government “intervention” that tries to micromanage the economy.
As examples of that, massive stimulus spending by Washington has not held down unemployment as promised, and ObamaCare socialized medicine has become an expensive grab-bag of unintended consequences despite being promoted as a way to cut spending.
A more recent “intervention” was Congress’ approval of a bill that seeks to spend $30 billion to “help” community banks lend more money to small businesses.
But the lending program has run into a snag. In the words of The Associated Press, “Many of the community banks and businesses it’s supposed to help don’t want it.”
But why turn down “free money”? Well, for one thing, money from government is never “free.”
“Some say the federal money isn’t worth it because they fear it will come with too much regulatory oversight,” the AP reported. That’s surely true. If you doubt that Washington uses money as leverage over those who get the money, just look at how much control the federal government has over our nation’s public schools even though it provides only a small percentage of their funding.
But there’s another problem with the lending program. It assumes businesses are not taking out loans simply because banks won’t lend to them. But the key reasons they aren’t borrowing are a lack of demand among consumers and high anxiety about where the economy and tax policies are heading.
“Bank executives say their customers don’t want loans, even at low interest rates, because the sluggish economy has chilled expansion plans,” the AP noted. In fact, more than 90 percent of small-business owners surveyed recently said they can get the credit they need. Lack of credit isn’t their problem.
“Our business customers are mired in uncertainty and are reluctant to invest in their businesses,” a Memphis banker told the AP.
Congress doesn’t need to “do” certain things – such as creating costly new lending programs – so much as it needs to stop threatening to do other things – such as raising taxes.
Unfortunately, we live in a time when a majority in Congress seems convinced that government is never quite big enough. So long as Congress keeps “misdiagnosing” the problem as too little government, it’s going to keep coming up with counterproductive “prescriptions” for more government.