Critics Say Federal Credit Programs Benefit Large Firms
Critics of the federal government's programs to jumpstart the economy have expressed dismay over what they say are unjust policies. They argue that government regulators favor large corporations over small businesses, resulting in more job losses over the past year. Detractors of the multi-billion dollar federal grants say that because the government has prioritized larger credit card companies, many small enterprises are missing sough-after assistance.
Citing expert opinions, critics point out that while Wall Street is enjoying billions of dollars in federal aid, ordinary Americans are at risk of losing their jobs because of the lack of assistance many small businesses fail to receive. Analysts say that small enterprises actually employ over half of the American workforce. These businesses also contribute to 38 percent of the country's total GDP, making it an essential component in the economy's growth or decline.
Many argue that the federal government has chosen to help corporate America but have neglected to provide relief to struggling small businesses. If these enterprises shut down, experts say that the U.S. can expect to see unemployment figures rise. The eventual increase in the jobless figures can also lead to more losses for the credit and financial industry, making any federal aid and grant futile.
Several analysts also say that the enactment of new credit industry laws may actually hamper the growth of small businesses. While the new legislation may offer ordinary consumers more protection against abusive practices of the credit industry, small businesses may end up with little or no access to additional credit. This can prove to be a disaster since studies suggest that these enterprises rely on credit to fund their operations. In fact, surveys have found out that 82 percent of small businesses use credit cards to stay afloat. With the impending implementation of the new laws, card companies have resorted to slashing credit lines, further placing entrepreneurs in more predicaments.
Without a proper source of credit, small businesses may have no choice but to shut down and lay off their workers. Critics allege that in effect, the federal government has removed the last remaining source of credit for many small enterprises, effectively cutting them off.
Some analysts argue that Washington needs to realize that the large firms enjoying billions of dollars in the taxpayers' money are not the entirety of the U.S. economy. They explain that more importance should be given to smaller businesses because of the impending unemployment crisis looming ahead.
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