Desperation

This is a sign of sheer desperation on the part of Obama and his “best and brightest”. (I use that term loosely.) They are now floating a trial balloon that would divert millions of dollars in TARP funds to small businesses in a frantic attempt to create some – any - jobs.

The Obama administration is developing an initiative to take money from the $700 billion program for the banking system and make it available to millions of small businesses, which officials say are essential to any economic recovery because they employ so many people, according to sources familiar with the plan.

The new effort — which would represent a striking shift from the rescue program’s original mandate — would direct billions of bailout dollars toward a program that aims more at saving jobs than righting the financial system.

A proposal being floated by senior Treasury Department officials calls for using the bailout funds to expand an existing government program that helps small companies borrow money from banks a low rates to keep their businesses going, the source said. These “working capital” loans would come with few restrictions and could be used for buying inventory, holding onto employees and paying off short-term debt.

The initiative would expand a Small Business Administration lending program called 7(a), the agency’s most popular lending program. Lines of credit for small companies could greatly increase in size. If the firm failed despite receiving this help, the government would cover most of the losses on the federal loan, perhaps as much as 90 percent. Lines of credit act like the credit cards for companies — short-term revolving debt used to pay a variety of immediate expenses.

Unfortunately for Obama and his team, the Pelosi-led House has also just announced that they plan to tax hell out of the “rich” to fund health care “reform”. This is a problem because said “rich” are those folks who show a $250k income – mostly because they are, in fact, small businesses that create jobs. 

So the Obama plan would essentially set up small business owners to be relatively successful in a down economy, thereby delivering themselves into the clutches of a Pelosi “Screw the Rich” plan.

My prediction: This plan will go nowhere even faster than super-genius Little Timmy Geithner’s toxic asset buyout plan.

Because small businessmen are being assured by Pelosi and others that they will be milked dry to fund extravagant spending plans. They would be crazy to take the offered money and boost their income right into the income tax confiscation zone.

What an utter bunch of fools we have running things in Washington right now.

Via Memeorandum.