The United States Government represents the ‘voice of the people’ or does it? Is the present Health Care Legislation really the voice of the people or is it the political powerhouses trying to make a point

I have spoken to a large number of small business owners and individuals that run private businesses. I have spoken to stay at home Mom’s, and every class of American I came in contact with to view their stance on the current Health Care Legislation. NOT ONE PERSON I SPOKE WITH SUPPORTED THE BILL!.

Interesting, I’m sure if you were to ask around you would find a similar result.

This bill was not ‘For the People’ or ‘By the People’ as Abraham Lincoln wished.

If we look past the manditory health care plan you will find several key factors that have devastating effects on the economy and small businesses.

1.  Health Care plan will produce a harder economic climate for Small Businesses

The plan states that- It is a requirement that people purchase health insurance.  This means that more dollars that were available for other purposes in the past, will now be directed to health care in the future.  Unless your small business serves the healthcare industry, these dollars are not headed your way.   Also, since nothing in the bill actually reduces heathcare and heath insurance costs, but actually increases them, an additional amount of dollars will flow into healthcare just to meet the rising costs.  These are dollars your businesses will not see from your customers because they are required to divert them elsewhere.

President Obama said that they will be providing “SHORT TERM” small business loans to help with this cost.

2. Higher health insurance expenses for Businesses

As noted above, nothing in ObamaCare reduces expenses.  The only way to reduce cost is to increase supply or decrease demand.  ObamaCare increases the demand for health care while doing nothing to increase the  supply of health care.  You will see your premiums increase if you provide healthcare to your employees or yourself.

3. Penalties and Fines

For some businesses, you’ll pay a penalty (fine) if you don’t provide health insurance for your employees.

4. Say Goodbye to Part-Time Workers

The penalty for not providing health care to employees is the same for part-time and full-time employees.  Since this penalty is part of the overall compensation expense for employing someone, it doesn’t make sense to employ part-timers.

The US Economy was on the verge of bankruptcy before the Health Care bill and now the cost are only going up.

Please make it stop!!!! Please we can’t take it anymore.

As you can tell from the map I created based on the current Labor Department numbers. The unemployment numbers continue to increase. I remember hearing that the U.S. unemployment are at generation highs and can’t go higher. Well they have and there is no end in sight. I hear of far more people losing their jobs then those finding jobs.

Small business owners are being pushed against the wall and they don’t have any room to support their staff to stay in business.

As Ed Morrissey from Hotair.com explains about the current health care bill the future is not promising for the current unemployment numbers.

This change in the parallel bill would have a big impact on small businesses, who already have trouble competing with their larger competitors.  It will force businesses into either paying for benefit packages that they can’t afford with their current staff levels, pushing them either into cutting staff to recoup the costs or shutting their doors altogether.  It will have a major impact on the part-time labor market, which supports student workers and second earners in families under normal economic conditions.

What does this mean for the American worker, more lost jobs, higher unemployment and policies that destroy our freedoms.

I have posted several posts discussing the severity of the US Financial Deficit in the hands of China. Below I have posted an article that support my concern. In order for the financial markets to rebound, the US can’t continue on it’s path of deficits and tax burdens that hamstring innovation.

Article

The Chinese can save both themselves and U.S. taxpayers by selling a large portion of their U.S. Treasury holdings this year. In fact, this economic missile may be the only way to save taxpayers in 2010.

Foreigners hold about $3.6 trillion in U.S. Treasuries, and foreign central banks hold two-thirds of that. The good news is that the Chinese and Japanese, combined, hold at least $1.5 trillion, or 12% of Treasury debt outstanding.

The Chinese and Japanese are our friends for two reasons: (1) Their net purchases help keep bond yields low, and (2) Chinese warnings about not buying more Treasuries or in fact selling Treasuries can send shock waves through capital markets.

Congress and the Obama administration don’t seem overly concerned with huge federal deficits. But the administration does understand the crisis that would be created in capital markets were the Chinese to become net Treasury sellers, even for a short period of time.

The Chinese can act as a constraint on the reckless federal spending of Congress and the administration. In fact, the Chinese may be the only realistic constraint in 2010. The administration seems to have ignored the voting results from Virginia, New Jersey and Massachusetts.

Some analysts say the Chinese won’t be net sellers of Treasuries. What is to prevent the Chinese from shorting the U.S. equity market before they announce they are going to be net sellers of Treasuries?

The Chinese can lecture the administration about excessive federal outlays, but nothing would be more effective than dumping Treasuries, even for a short time. Such action would panic investors, and as a result the administration may well agree to constrain spending to placate the Chinese.

No one wants havoc in the capital markets, but the Chinese can do U.S. taxpayers a major favor by dumping Treasuries just as soon as the Chinese can buy their put options on U.S. equities.

U.S. equities will quickly recover their lost ground and much more if the administration would agree to constrain federal outlays. Excessive federal spending and regulatory involvement in the economy are holding back equity gains.

The sooner the Chinese dump Treasuries, the better. It is a message that all members of Congress, as well as the Obama administration, need to hear. The Chinese needed to take such action during the Bush years, but that is water under the bridge.

The Chinese can see how the Japanese ruined their economy by growing public debt outstanding to over 225% of GDP in 2010 from 68% in 1991, according to IMF data. The U.S. outstanding public debt to GDP ratio was also 68% in 1991. In 2008 it was 70%. At the end of this year it will be about 94%.

The current Congress and administration seem intent on repeating the mistakes of Japan that in the end will also ruin the U.S. economy.

The Chinese need the U.S. economy to thrive and buy the large volume of Chinese exports, thereby sustaining growth in the Chinese economy. A strong U.S. economy is in the interest of the Chinese, who would face major social and political issues should the U.S. economy falter and Chinese unemployment rates increase significantly.

No one wants the U.S. to be the next Greece, and the sooner the Congress and administration are forced to start making cuts in government spending the better. State and local governments need to take the same action.

Large deficits and increases in outstanding public debt in mature economies like the U.S. and Japan only act to slow economic growth as the resulting tax burdens cripple incentives for innovation and expansion.

The Chinese may be our salvation in 2010.

By MIKE COSGROVE

We all have heard of the closed fist methods of Hugo Chavez of Venezuela, the socialist president with a thirst for power and oil.

Chavez provides a lesson in history with regard to government intervention and paints a new picture of current health care plan purposed by President Obama. In 1998 Chavez wanted to win the hearts of the majority in his country during the 1998 election. He imposed price controls on hundreds of goods to make food and other essentials more affordable for low-income people. He wanted to make sure those that were struggling could eat. This was a very admirable goal, but with intervention came sever consequences.

An Economic Lesson: The Price of a Product reflects the costs of the transactions and processes required to make it.

The price controls may have given Hugo Chavez a quick political stimulus response but the lasting effects were devastating. The result of the price controls threw the markets for the food products out of whack (and his nation’s economy). Today the only place to obtain food in Venezuela is on the black market and you know what the prices are like on the black market.

As we can observe from this experience, governments have good intentions to provide a good or service to the entire public by stepping into the market to impose their new ideas with the intent of correcting the market. As we have learned with Venezuela, when the government steps in to correct a ‘market failure’, they end up creating a worse market failure, complete chaos.

What can we learn from Venezuela as it relates to the U.S. health care bill? Let the market run its course- government intervention rarely solves economic problems. The solutions to our problems come by innovation in the market, not by trying to appease all with manipulation.

I definitely don’t want to be getting my healthcare off the black market.

WASHINGTON – The economy rocketed ahead at a 5.9 percent pace in the final quarter of 2009, stronger than initially estimated. But the growth spurt isn’t expected to carry over into this year.

The fresh reading on the nation’s economic standing, released by the Commerce Department on Friday, was better than the government’s initial estimate a month ago of 5.7 percent growth. It would mark the strongest showing in six years.

Even so, it didn’t change the expectation of much slower economic activity in the current January-to-March quarter.

Roughly two-thirds of last quarter’s growth came from a burst of manufacturing — but not because consumer demand was especially strong. In fact, consumer spending weakened at the end of the year, even more than the government first thought.

Instead, factories were churning out goods for businesses that had let their stockpiles dwindle to save cash. If consumer spending remains lackluster as expected, that burst of manufacturing — and its contribution to economic activity — will fade.

The signs aren’t hopeful. Consumer confidence took an unexpected dive in February. Unemployment stands at 9.7 percent. Home foreclosures are at record highs. And many Americans are still having trouble getting loans.

Forecasters at the National Association for Business Economics predict the economy will expand at only a 3 percent pace in the first quarter of this year. The next two quarters should log similar growth, they predict.

Unlike past rebounds driven by the spending of shoppers, this one is hinging more on spending by businesses and foreigners.

Stronger spending by businesses and foreigners contributed to the bump-up in economic growth in the fourth quarter. So did the fact that companies stopped slashing their stockpiles of goods. During the worst of the recession, companies cut inventories at record rates.

Businesses boosted spending on equipment and software at a sizzling 18.2 percent pace, the fastest in nine years. Foreigners snapped up U.S.-made goods and services, which propelled exports to grow at 22.4 pace, the most in 13 years.

And the slower drawdown in businesses’ stockpiles accounted for nearly 4 percentage points of the fourth-quarter’s overall growth, even more than the government first estimated.

Wary consumers
Consumers, however, lost energy. They increased their spending at a pace of just 1.7 percent. That was weaker than first thought and down from a 2.8 percent growth rate in the third quarter.

Looking ahead, consumer spending is expected to aid the recovery — not lead it. That’s one reason why the recovery is expected to move forward at only a moderate pace of around 3 percent in coming quarters.

In normal times, such growth would be considered respectable. But the nation is emerging from the worst recession since the 1930s. Sizzling growth in the 5 percent range would be needed for an entire year to drive down the unemployment rate, now 9.7 percent, by just 1 percentage point.

For all of this year, the economy is expected to grow 3.1 percent, according to the NABE forecasters. Though modest, that pace would mark a big improvement from 2009, when the economy contracted by 2.4 percent — the worst showing since 1946.

As government stimulus wanes and Federal Reserve economic-support programs end, the economy — especially the fragile housing market — could suffer. Economists say the odds of the economy sliding back into a recession this year are low, but they won’t rule it out.

In appearances on Capitol Hill on Wednesday and Thursday, Federal Reserve Chairman Ben Bernanke said record-low interest rates are still needed to make sure the recovery becomes firmly rooted and to help ease high unemployment.

If gains from inventories and exports are taken out, the economy last quarter grew at just a 1.6 percent pace.

And, improvements in the housing market also tailed off at the end of last year — despite massive government support.

There’s worry inside and outside the Fed about how housing will fare once a homebuyer tax credit ends in the spring and the Fed stops a mortgage-securities buying program that has lowered mortgage rates and boosted sales.

Source: AP News / MSNBC

While many entrepreneurs dream of raising capital from the outset, the reality is that most startups must be bootstrapped long before an angel investor or venture capital firm will give them the time of day.

At Infusionsoft, we bootstrapped the company in the beginning and eventually secured $17 million in two rounds of venture capital funding.

As we worked up to the venture capital level, we were obsessive about growing  customers and revenue (thus taking risk off the table for future investors). Early on, I saw this as the most effective way to both raise money and hold on to shares of the company. I fell in love with the idea of only taking as much money as necessary to get us to that next stage of business.

In doing this, we noticed we went through four steps of financing:

* Banks: Small credit lines allow you to discover your market
* Friends/family: Once you’ve got the market identified, this funding allows you to develop a prototype
* Angel: Once that was complete, we secured $1 milllion to prove the prototype
* Venture Capital: This money allowed us to scale the business and become profitable

By the time we got to the venture capital stage, we had a number of investors that were interested in us, because of our recurring revenue.

When you get right down to it, getting funded is a risk/reward proposal to the investor. You can either work really hard on the risk part of the equation (i.e. have revenue) or you can focus on reward (i.e. ‘we have the next Google’). The biggest challenge an entrepreneur faces is you must present an equation that is makes sense to investors.

In this economy, revenue is the most compelling argument you can make. Investors are nervous – and work hard to mitigate risk (much like banks). Investors that historically could be counted upon to put more money into the VC funds are often no longer able to do so – meaning VCs don’t have as much freedom to focus on the risk.

The timing for our series B fundraising round could have been better. We began loosely talking about beginning the search for a second round in the summer 2008, but actually went out in early September. In hindsight, we should have gone out a month or two earlier – because by that time the economy was in crisis mode.

Turns out my approach to getting just enough money for each stage proved to be less than prudent in this case, as it prevented us from going out at the right time in the market.

We didn’t need to raise any money when the market was good, but by the time we decided it was time, the market was three weeks away from collapsing. Ultimately, we probably would have raised more cash for the same equity had we gone out a month or two earlier.

The big lesson: only take the money you need to get to the next round – with the caveat that you need to pay attention to what the market is doing because it’ll affect your valuation.

Taking money down the road may be more expensive than taking less now. So even if you still have plenty of cash in the bank, you need to watch what the market is doing and understand how that impacts your valuation.

The other lesson learned is the importance of selling. When you don’t have cash in the bank, you’d better know how to sell. It’s amazing how many entrepreneurs who raise capital are great in academic discussions but terrible on a sales call. The art of persuasion is not what business school is teaching, but it’s what drives the success of the business.

Often when you have raised VC, it’s easy to fall into the “strategy” trap. That’s where the team spends most of its time engaging in relentless discussions on strategy and big ‘game-changing’ things, which is fine, but who’s selling? When you haven’t raised VC you get your butt on the phone and you persuade people to buy your stuff. That’s what we did in the early stages of Infusionsoft, and despite our two rounds of venture capital funding, we still make sure to keep that part of the business running without interruption.

Selling is what drives the business. It also drives an efficient use of your VC firm’s capital later on.

The bottom line? Get customers, show revenue and prove your model first. That’s easier said than done, but in the end, it’s the best, most viable way to getting the capital you need to take the business even further.

Source: Clate Mask

We are a nation of dreamers.

Some of us yearn for an idyllic life as a novelist, shaping a story in a quaint country house. Or hope to wake up in a swank city apartment and take a company-paid town car to a top financial firm.

Still others want to be like the millions of entrepreneurs who had the guts and drive to push their big ideas into businesses that they own and operate — beholden only to themselves and the customers they cultivate.

Remarkably, even in dire economic times such as these, the desire to own a small business doesn’t diminish. Annual business creation in the U.S. has remained consistent for nearly 30 years, even during downturns, according to a new study from the entrepreneurship-focused group Ewing Marion Kauffman Foundation.

“Entrepreneurs are not easily discouraged,” Kauffman CEO Carl Schramm says. “In boom times and in tough times, roughly 600,000 firms are formed every year in America — about one per minute.”

Even the harsh climate of the past two years, the worst economic crisis since the Great Depression, hasn’t smothered such aspirations. Credit has evaporated and consumers have closed their wallets, yet hordes of potential business owners still possess a can-do attitude.

“For a lot of entrepreneurs, when they have an idea, it becomes a passion, almost an obsession,” Schramm says. “They cannot not do it.”

Lots of contenders

The push to start a business is varied. Some decide after a layoff that they never want to report to another manager again. Others want to turn their passions — quilting, genealogy research, book collecting — into full-time vocations.

Last fall, USA TODAY published a six-part series about starting a business and asked prospective entrepreneurs to submit their business ideas for the Small Business Challenge, a six-month series that would follow their progress as they moved their businesses from ideas to making the first buck.

Near 1,800 budding business owners responded, pitching ideas displaying ambitiousness, earnestness, smarts and yes, even misguided drive and planning.

Submissions included: restaurants, a tattoo parlor, an Italian ice pushcart business, a dog-poop-scooping service, an iPhone app-creation firm, a tanning salon, the invention of an Easter egg dying kit targeted to dog owners, a tourist-photography business, a line of feminine-looking gun cases targeted to females, and an “ultra-thin, liquid nipple cover” that would help prevent chafing from workout clothes and other materials. Contenders covered all ages, ethnic backgrounds and geographic locations.

The range of sophistication and — in some cases the lack of it — does not surprise experts. The entrepreneur coaching groups Score and the Association of Small Business Development Centers, which combined help more than a million people a year, say they regularly see clients who have each, and sometimes all, of these traits.

But it’s enthusiasm that often stands out more than any other characteristic. That’s expected among entrepreneurs, says Rick Wade, the U.S. Commerce Department senior adviser and deputy chief of staff.

In general, Americans are hopeful, he says: “It’s at the core of who we are.”

But he stresses that small business owners, in particular, “have a different kind of drive.”

“They’re accustomed to overcoming obstacles,” he says. “I don’t know of any start-up that didn’t have a challenge.”

Meeting these challenges gives entrepreneurs the inherent knowledge that they will be able to survive hard times. It’s the mindset of “we fall down, but we are going to get up,” he says.

Up-and-down emotions

When Carl Edmunds’ division at a corporate printing company was on the potential chopping block, the West Windsor, N.J., resident morphed an interest in household repairs into a new career as a home inspector and energy use auditor.

“It’s time to take control of my own destiny!” Edmunds, 56, wrote in his submission to USA TODAY. “I will not continue to live in constant fear of the inevitable arrival of the proverbial ‘Pink Slip.’ ”

Edmunds’ business, NuVision Inspections, is one of five start-up firms that USA TODAY will follow for the next six months. The others: a wine bar in Gainesville, Va.; a high-end property rental service for homes in Vail and Golden, Colo.; a Botox-provider in Mequon, Wis.; and an all-natural butter-toffee-peanut seller in Orlando.

Although each business is beyond the idea stage and through initial struggles, the neophyte owners will continue to experience the self-fulfilling highs and gut-wrenching lows that come with self-employment.

Running a business is “an extremely messy process,” says Dane Stangler, a senior analyst at Kauffman.

“We may boil it down to business-plan-writing at universities,” he says. But it’s not that simple. “It’s one step forward and one step back, and then some side steps.”

Edmunds has been mentally taxed as he has taken six different licensing tests in two months, as well as insuring and incorporating his new firm. Tasks such as developing a company website have been placed on the back burner.

“I’ve hit a lot of stumbling blocks,” he says. “I had no idea how difficult this would be.”

Yet, on Jan. 12, he received some uplifting news: He passed a vital home-inspection exam. With that final license secured, he should be able to launch his business in time for the spring real estate push.

“I’ve always wanted to be my own boss,” he says. “I can work out of a little 8-by-8-foot office in the back of my house and a pickup, and be happy.”

A long road

Start-up accomplishments come in many forms, such as getting a website’s e-commerce function to work, creating a high-impact marketing campaign and even persuading a potential distributor to take a chance on novel new products.

But for new business owners, rejection and unexpected obstacles will come with the territory, Stangler says.

Each year, home shopping giant QVC gets pitched hundreds of thousands of ideas from hopeful business people. Yet only about 15,000 new products will get on the air each year. (Another 45,000 products come from existing suppliers.)

The long odds also come into play at TeleBrands, the infomercial seller of products such as the PedEgg foot callus remover, Pedi Paws pet nail trimmer and Stick Up Bulb wireless light bulb. Telebrands receives about a thousand product pitches from entrepreneurs annually but typically markets only four or five new products.

“The majority of ideas — the majority of products — do not sell commercially,” CEO A.J. Khubani says. “Take Thomas Edison: He had over 1,000 patents to his name, yet how many were commercially viable? We only know of a few.”

Small stumbles and all-out defeats are common for entrepreneurs. Yet, one way to work around those pitfalls is to rely on advice from others, as well as learning from past mistakes. “Everyone has a dream,” says Doug Rose, QVC head of programming and marketing. “But if you’re really, really wise about how to develop it, you’ll listen to feedback from others, and you’ll welcome it, even if it’s hard to hear”

Rodney Hughes, a USA TODAY small business challenger who is selling the butter-toffee peanuts, knows what it’s like to see entrepreneurial dreams crumble. One of his past businesses, a printing shop in Tennessee, went under in the economic downturn after the Sept. 11 terrorist attacks.

“It was one of the roughest times of my life,” he says. “But I learned some lessons.”

Among them: Don’t rely on one client for most of your business. Hughes had one buyer who represented 70% of his sales, and when that buyer stopped purchasing printing services, it had a dramatic effect on his business.

Hughes has a more cautious path to entrepreneurship now.

He holds a full-time job working in business development at the Metro Orlando Economic Development Commission but has invested in other firms such as a bar in Orlando.

He also took some of the pressure off himself by partnering with friend Lee Goldberg and several others to start the nut line. So far, the venture has had its share of setbacks, but the group also is proud to have created a logo and aggressively seeded online media with mentions of their brand.

Successful entrepreneurs learn to balance the good times and bad.

“The most important (trait) is resilience,” says Kauffman’s Stangler. “It’s about not giving up hope.”

Hughes and his peers at Poppa D’s haven’t sold their first commercial bag of nuts, but they still have confidence.

“For us, it’s just the fact that we feel in our hearts that we can make this work,” Hughes says.

By Laura Petrecca, USA TODAY

U.S. consumer spending rose slightly less than expected in December as households opted to save extra cash, lifting savings to a six-month high, a government report showed on Monday.

The Commerce Department said spending rose 0.2 percent after increasing by an upwardly revised 0.7 percent in November. Consumer spending in November was previously reported to have climbed 0.5 percent. It was the third straight monthly gain in spending.

Analysts polled by Reuters had expected consumer spending, which normally accounts for over two-thirds of U.S. economic activity, to rise 0.3 percent last month.

For the whole of 2009, spending fell 0.4 percent, the largest drop since 1938.

Boosting consumer spending is critical to putting the economy on a sustainable recovery path, but a 10 percent unemployment rate is pressuring households.

The economy grew at a 5.7 percent annual pace in the fourth quarter, its fastest clip in six years, driven by a sharp slowdown in the rate at which businesses reduced stocks of unsold goods, the government said on Friday. Consumer spending slowed to a rate of 2 percent after rising 2.8 percent in the July-September period, the GDP report showed.

In December, spending adjusted for inflation edged up 0.1 percent after rising 0.4 percent the prior month. Personal income increased 0.4 percent last month after increasing 0.5 percent in November, the Commerce Department said. That was a touch above market expectations for a 0.3 percent increase. For the whole of 2009, personal income dropped 1.4 percent, the largest fall since 1938.

Real disposable income climbed 0.3 percent last month after rising 0.3 percent in November. The rise in income saw savings rising to an annual rate of $534.2 billion, the highest level since June. The savings rate rose to 4.8 percent from 4.5 percent the prior month. For the whole of 2009, savings rose to a record $502.7 billion.

Commerce Department data also showed the personal consumption expenditures price index, excluding food and energy, rising 1.5 percent from a year ago in December. The index, which is a key inflation measure monitored by the U.S. Federal Reserve, increased 1.4 percent in November.

Source: Reuters

U.S. real GDP rose a much stronger-than-expected 5.7 per cent annualized in Q4, building on a modest 2.2 per cent advance in Q3, and a far cry from the 5.4 per cent slide of a year ago.

“The advance in exports, personal consumption and business capital spending points to some positive momentum in the economy,” said Sal Guatieri, Senior Economist, BMO Capital Markets. “First-quarter GDP growth should top 3 per cent, further distancing the economy from the Great Recession, and encouraging firms to resume hiring.”

More than half of the quarterly increase reflected inventory rebuilding, with an assist from net exports. Exports soared 18.1 per cent, even topping the prior quarter’s sharp gain, amid support from an upswing in global demand and a weak dollar. Final sales (GDP ex-inventories) strengthened to 2.2 per cent, though final domestic demand weakened a bit to 1.7 per cent. The latter reflected a moderation in consumer spending (2.0 per cent), after the cash-for-clunkers auto program boosted sales in Q3. However, the underlying rate of consumer spending, though still soft, looks to have picked up.

Government spending was also weak due to ongoing retrenchment at the state level and a pullback in defense spending. Non-residential construction remained in the dumps, sliding 15.4 per cent. The main upward surprise in the report came from a 13.3 per cent surge in business equipment spending, the fastest in nearly four years. Recent strength in capital goods orders, coupled with the President’s proposal to provide investment tax credits, point to ongoing strength ahead. Residential construction also advanced further in Q4, despite a recent pullback in housing starts.

Source; PR Newswire