Economic Stimulus & Mortgage Reform
February 23, 2009
Recently, I attended a luncheon meet sponsored by the Chicopee Chamber of Commerce, where the presentation was entitled, “Future of Manufacturing in Massachusetts.” The presenters, Rick Pelliagrini the Industry Director for Manufacturing for the MA Office of Business Development and Glen Gertridge from MA MEP, spoke about the positive future for manufacturing in the Commonwealth and how Governor Patrick understands and is concerned about the welfare of manufacturing companies.
It was truly an amazing fact that nearly 300,000 jobs in Massachusetts are in the manufacturing sector. At the end of the presentation there was a question and answer session where there was noticeable feelings of anger, and a “We’ve heard this all before” from the attendees. Frankly, given the recent trends in government, it is hard to believe that any business can survive in Massachusetts.
I work for Chicopee Industrial Contractors, a small business concern that relies heavily on the manufacturing sector in the Commonwealth for our business. Small businesses account for the following according to statistics from the SBA:
• Represent 99.7% of all employer firms.
• Employ about half of all private sector employees.
• Pay nearly 45% of the total US private payroll.
• Have generated 60 to 80 percent of net new jobs annually over the last decade.
But…
• Small business spends 45 percent more per employee than larger firms to comply with federal regulations.
• The average employer with 20 employees pays $7,647 per employee in regulatory costs ($1,304 of this is tax compliance). The average cost for large firms is about $5,282.
• The insurance for small company health plans have higher administrative expenses.
As Ziad Abdelnour, President of New York based Blackhawk Partners recently wrote, “President Obama’s economic stimulus package does not address any of the needs or concerns of small business. The reality is that the “millions” of jobs that President Obama’s stimulus supposedly creates are government jobs. But what happens when those jobs are completed? Is everyone laid off again? Does President Obama pass another stimulus bill?”
“Very simply the math shows that regardless of how much we raise taxes in the future; there is no realistic way for the US to ever pay off this debt. The truth is that the president and Congress could have created economic stimulus by across-the-board tax cuts for all Americans, and tax incentives for businesses to hire new workers and use their capital for new purchases – instead of hundreds of billions of dollars to bolster federal and state welfare programs. They chose to expand government and increase people’s reliance on it, while the private sector, which pays the bills, is shrinking.” I couldn’t agree more.
If one also considers the mortgage bailout the estimated 90% of people who are paying their mortgages on time will see no benefit. Once again, those who play by the rules receive no benefit or relief while those who have taken advantage of the system and abused the rules keep taking and taking. This is another attempt at social engineering, when in reality these mortgages were forced upon the lenders, by the government. Inevitably these same mortgages will fail again in the future and who will be left to bail them out again? The private sector.
Governor Patrick stands ready to propose an increase in the cost of gasoline by 10% per gallon. It also appears that tolls on the MA Pike will rise regardless of the outcome of the increase in the gasoline tax. All for what reason? To pay off the debt of the big dig. The vast majority of the residents in Western MA have not seen, nor will they ever see, any benefit from this project and have been forced to pay more than their share to fund it.
So the question becomes, do you support the tightening of the noose around the neck of manufacturing and small business? Massachusetts and our Governor claim to be manufacturing and small business friendly, but the recent moves by the federal government and the proposed moves by Beacon Hill will make it virtually impossible for small business and manufacturing to survive.
For once, let’s have our leaders at the State level forget about their party affiliations and vote for what is right and best for their constituents. In these difficult economic times, any increase in taxes or fees cannot be in the best interest of anyone.
