This is the annual sum the Federal government gives in tax write-offs and subsidies to the corporations each year, around 80% of which goes to top 500 companies.
This is a pot of $100billion every year which is in essence given away or more bluntly pays for the 20% hike in CEO salaries we have seen over the last year as they cut jobs and offshore at a pace.
Personally I think there is a more profitable risk to be taken with our tax dollars.
Say for arguments that a good starting point in setting up a small business is $500,000 [more than most potential entrepreneurs have access to], this makes available 200,000 loans. These can be interest free and repayments start when the business becomes profitable; taxes can be waived for the first three years.
Say each business employs on average 5 people, that means 1,000, 000 people now become tax payers on their earned income so some recovery of the $500,000 has already started.
Say 40% of the businesses fail after three years [most businesses fail due to lack of capital] and $400 million is written off after and 400,000 are unemployed.
Say a further 40% grow by 1 employee over this time, that employs a further 80,000
Say 15 % grow by 30% and that creates 1.5 employees [remember by starting small growth can be rapid] this creates 45,000 new jobs.
Say 4% double their employees and that creates another 80,000 jobs.
1% become very successful and employ 50 people, that means another 100,000 jobs.
So at the end of three years time we now have created 905,000 jobs and new tax payers for the sum we give away in subsidies, and we have started to get returns from repayments of the initial loan, business taxes also start to reap rewards at this time.
This increase in small business activity will also have a knock on effect in their suppliers and service providers, again creating more employment.
US unemployment is running at around 14,000,000 with another 14,000,000 wanting full time work.
Say if my figures are over optimistic and we only manage to create 500,000 new jobs over the year; it is still better than paying for CEO bonuses and financing corporations off-shoring methodology.
Once people start working again the economy expands and more jobs become available, I like to think of this way of using $12 billion as having confidence in "the people".
Of course you could expand the program, but this could be a start with minimal risk.
How many of you have dreamed of starting your own company but cannot get the loans?
Fully 99 percent of all independent enterprises in the country employ fewer than 500 people. These small enterprises account for 52 percent of all U.S. workers, according to the U.S. Small Business Administration (SBA).
I say this sector is well worth investing in.
Updated by LaFeminista at Mon May 16, 2011 at 08:35 AM CEST
Regard the initial interest repayments as the money saved on unemployment benefits