Economists push for more federal aid for small businesses

Recently, the Obama administration supported legislation that would bring nearly $30 billion worth of funds to community banks to increase small business lending, but some officials believe more needs to be done to boost small business formation and – hopefully – hiring rates.

According to the New York Times, economists are waiting for the government to make a final infusion to encourage employers to hire and banks to lend to small businesses. The newspaper quotes Mark Zandi, chief economist for Moody’sEconomy.com, as saying, “It’s very important for policymakers to provide significant support to the economy – by which I mean deficit spending – until employment is definitively moving along.”

Zandi advocates at least $80 billion more for aid to states and the unemployed. The New York Times says this would bring total stimulus spending and tax cuts to more than $1 trillion.

The White House is currently supporting a proposal that will raise $25 billion over 10 years through tougher Wall Street regulations, says the newspaper. These funds would be used to create more small business tax cuts which legislators hope would encourage entrepreneurs to create a corporation.

With the support of national economists, it may be prime time to start a business. In fact, USA Today says it is currently a “great time” to start a business, and it advises entrepreneurs to take advantage of the expertise of startup professionals to get their companies off the ground.