One of the biggest economic issues I’ve read about over the past year has been the fact that small businesses have LOST their lines of credit. Without those lines of credit, they can’t pay for the things they need on a daily or weekly basis to stay running – and that includes payroll. And if you can’t pay payroll, you lay people off. And if you can’t buy the basic materials to create the products for your business, you shut down. So the easiest solution, and one that will cost ZERO dollars is to force the banks to start lending again! And I’m NOT talking about consumer lending – just business lending.
So, HOW do you force banks to re-open those lines of credit? Very simple – have the FDIC threaten to pull their backing from banks that have stopped or drastically reduced business loans. That doesn’t mean give bad loans – that means that all those companies who had a $1 million line of credit over the past 2 years who have suddenly been reduced to $80,000 need to get their lines of credit back.
For example, if a bank has made an average of $1 billion worth of business/line of credit loans in a year, that breaks down to about $80 million a month. The government just needs to tell each bank – "Make just $40 million worth of loans each month, starting this month, or the FDIC will announce that they are pulling your backing." And yes, it IS that simple. The congress and "savior" obama can do whatever they want – and this would cost NO money. ZERO DOLLARS! The government shouldn’t be SPENDING more money to help small business – they should be using their power to make things happen!