The Bush tax cuts are set to expire next year. Caps on Medicare and Social Security are going to be raised and lifted. Cap and Trade, ineffective stimulus, busted entitlement programs, and pogroms against private firms and small business have made us all a little uneasy about investing capital.
I'm a small businessman. This year, we were prepped to hire another employee, and as many as three. The plan was to have as many as five new hires by next year. These would be fully employed, well-paid, and insured workers, varying in skill level. Our plans included hiring skilled empoyees, an entry level, and finding someone who was unemployed who could learn a new skill.
We decided against that. Instead, we retired our debt. We looked everywhere we could to pay off personal and corporate debt, holding off on a new car purchase, cutting back on luxuries, and hoarding cash for an uncertain 2010.
In some ways that was an easy decision. Debt levels have a way of increasing once in place, but the price of stability was growth. We are poised to do well next year, but we won't see a tripling of our revenue like originally forecast. Unlike many people who blame the economy, our company isn't suffering from a lack of work. New and old clients want our services, but we simply don't have time to sell, manage, and execute all of the work. Hiring someone new and training them is a risk to any small business. The loss of time if they don't work out, the constant pressure on cash flow, and the amount of paperwork necessary to effect a hire just isn't worth it. In most cases, the employee would at best break even after a year, and even if they were successful, it would necessitate more hiring to fill the gap between work sold and work performed.
In normal conditions, the promise of a payoff makes it worth it. The thought of selling the company for millions after five or ten years is a powerful incentive. It's worth the risk of losing everything in bankruptcy if you hire poorly or if the economy just tanks. Looking at our national debt level, and the complete lack of fiscal sanity from our leaders, affects my decision to bring on more risk.
The conclusion we've reached is that we can do quite well on our own. We don't need to hire this year, and so we're focusing on profitable business and automated processes. It's less satisfying, but the risk profile is very low. No matter what happens, we'll be okay.
But that person we would have hired? The clients who could have used our services to improve their businesses and save money? The taxes paid into the system by productive citizens and companies? I don't know how they'll do.
What I do know is that my decision is mirrored by dozens of my acquaintances, and probably tens of thousands of others like me around the country. In our own ways, we're all going John Galt - some by choice, some by necessity.
If you are lacking in employment - or know someone who is, think about the impact that all of these business owners have on your communities. If you are a young person starting out, ask yourself what voting for people who promised you bigger government has gotten you. In the next year, we are going to find out if the government can create prosperity. It has never worked before, but maybe, just maybe, this time it will.
And next year, vote accordingly.
If there were any chance at this point that *either* of the two parties with a realistic chance of getting elected had any intention of shrinking the government, I might be with you on this.
Posted by: www.google.com/accounts/o8/id?id=AItOawkdICNWeAFyfsh1vSQQk8NCF0nyJh_do6E | 11/14/2009 at 04:16 AM