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By Marshall Kirby, Public Policy Analyst

There has been a lot of media attention paid to the plight of cities in the Midwest, Rust Belt, and other areas which have experienced the economic hardships which come with deindustrialization.  The recession has hit these areas hard, and has increased the hardships faced by their residents with increased unemployment, lower wages and incomes, higher poverty rates, and increased reliance on public assistance programs.

However, there has not been a lot of attention paid to the Sunbelt – or the region of the country which was supposedly where jobs and economic growth were most stable.  However, in many cities and counties across the Sunbelt, which stretches across the southern US from east to west, the poverty rate has jumped faster and more significantly than any other region.  The Sunbelt is not alone as areas which were experiencing rapid growth like the Mountain west and the Pacific Northwest have experienced similar trends.  While poor inner cities in the Midwest like Detroit and those in the Northeast like Buffalo and Newark still have higher poverty rates, the trend is definitely noticeable and trickling out into once booming suburbs in the south and west.

Some explanations of this phenomenon can be seen as specific to the particulars of this recession.  For instance, those who have studied this note several concurrent and related problems with areas in the Sunbelt and the west.  Both areas have seen a significant fall in property values, and the current economic climate has impacted suburban areas due to fewer opportunities available to them (compared to major cities).  The major trend is that these areas developed and grew from the housing bubble, which fueled not only the construction industry in these regions, but also service sectors. Read the rest of this entry »


By Marshall Kirby, Public Policy Analyst

Almost everyone knows America is facing a fiscal and budget crisis.  Years of spending more than was brought in have now caught up with us, with some help from a recession.  You’d be hard pressed to find an economist or policy analyst who would argue that this is not a major concern for the economy and nation as a whole.  However, you do find debates in the policy solutions legislators propose.  Should we make serious cuts in budgets to reduce the deficit, or do we make gradual cuts given that we still are in the midst of high unemployment and economic uncertainty?  There are serious and sound arguments that each side can make.  But when it comes down to it, there needs to be a sound strategy of what we can realistically cut without producing negative short, mid, and long term implications for the economy at large.

This is where many people get frustrated (including myself).  There are a lot of things that the government spends on that are wasteful, just as there are many valuable programs that promote growth and important social causes.  However, this does not help in quantifying these areas – in fact we live in a highly partisan time and each party’s anathema is the other’s idea of a successful program.  However, it seems in the past few weeks that Democrats and Republicans have found some bipartisan common ground – albeit with a frightening proposal.

Senators Mary Landrieu and Olympia Snowe both on the Senate Small Business Committee, have formed a cross party alliance and have drafted a letter already sent to Small Business Administration head Karen Mills.  The leaders request that Ms. Mills come up with programs which can be “cut” or “eliminated” without hampering the ability of the SBA to operate and serve the Small Business Community.  Both Senators in the past have been avid supporters of the SBA and of promoting small business interests.  It seems even stranger in that the previous decade was marked with reductions in the budget.  In 2006, the budget was $440 million, down from 2001 when it was $674 million.  To President Obama’s credit, he restored some of the SBA’s funding in 2010 bringing it $687 million (this is a nominal increase, but when accounting for inflation, it represents still a lower proportion of funding than in 2001).  The stimulus bill did provide additional money for small business loans, but with that funding drying up, the future is uncertain for the types of programs and loans it will be able to deliver to business owners and entrepreneurs. Read the rest of this entry »

While so many in Congress and the White House seem entirely concerned about providing large loans to large, existing businesses for their development and expansion needs, we too often forget about businesses that historically produce the greatest number of jobs in the shortest amount of time:  small businesses.

The following article discusses the Micro Loan program of the SBA.  Keep in mind also, that, after a recent partnership with Accion, The National Puerto Rican Chamber of Commerce is now one of these lenders and can help small (to VERY small) businesses to obtain one of these loans.  Just give us a call . . .

posted at

What You Need to Know About Micro Loans

The most tangible example of the micro loan exists in the United States, but did not originate in America. Originally conceived as a way to combat poverty, economist Muhammad Yunus received the 2006 Nobel Peace Prize for originally devising the program to benefit the Bangladesh poor.

Now the concept is used widely by the Small Business Administration to benefit small businesses and entrepreneurs in the purchase of improvements, inventory and equipment. These loans also provide working capital to launch small businesses. Read the rest of this entry »

as posted here:

The Christie administration says it’s trying to make the state more comfortable for small business, but a survey released earlier this month shows just how tough a task that is.

The Small Business and Entrepreneurship Council’s 15th annual Small Business Survival Index, released Dec. 9, showed the Garden State as last among the 50 states. Only the District of Columbia was rated worse.

“The bottom line is politicians love to talk about how much they support small business, this index is seeing whether that rhetoric matches the actual policies and regulations being put into place,” said Raymond Keating, chief economist for the Small Business and Entrepreneurship Council.

Erin Gold, public affairs officer for the New Jersey Economic Development Authority, acknowledged that the state has work to do, but was optimistic about the future of New Jersey’s small businesses.

“I think we’ll see a lot of change in the new year,” she said. “With the Christie administration coming in, there’s a big focus on small business.”

Gold said following his Partnership for Action plan, Christie plans to relax rules on taxes, regulations and lending for small businesses

The plan includes initiatives like the Business Action Center which gives small business owners access to resources – loan, regulation and permit information – that would normally be out of reach, she said. Read the rest of this entry »

by Marshall Kirby, Public Policy Analyst

President Obama recently announced a move which has garnered significant attention in the political and business communities.  The announcement amounts to a review of current regulations which the Federal government has placed on businesses and the way they operate.  This move has come as a bit of a surprise, but was not entirely unanticipated.  With the Democrats losing control in the House of Representatives and losing several seats in the Senate, and with the White House facing low approval ratings, most political insiders and commentators have expected Obama to adopt more centrist policies and work harder at improving a sputtering economy.

Since entering office, President Obama has been hit repeatedly from conservatives and the business lobby over concerns of higher taxes and a more encumbering regulatory environment as a result of health care reform and the proposed cap and trade legislation.  Last year, the Administration engaged in a very public battle with the US Chamber of Commerce over legislation with the US Chamber of Commerce accusing the President’s policies of being job killing and unfriendly to business.  Tom Donohue, the President and CEO of the US Chamber even went so far as to say that US based businesses were facing a threatening “regulatory tsunami” (Wingfield, Brian). Read the rest of this entry »


In the State of the Union address last night, President Barack Obama sent a message to small business owners: Your innovative ideas are key to recharging the American economy.

What wasn’t discussed much was the way the Obama administration plans to offer much of its stimulus for innovation. Recently passed legislation will shift much of the government’s funding for innovation into contests that award prizes, rather than straightforward grants.

The change came in the reauthorization of the America Competes Act, which was part of the crush of last-minute legislation passed at the end of last year. Where previously, much of the funds the federal government uses to reward innovative companies in science, technology, engineering, and related fields has been through a grant-application process, that’s changed now. Read the rest of this entry »

The following article was posted in late December, however, we thought it deserved another read.  We especially liked the part about the Small Business Innovation and Research funding bill getting hijacked, taking everything out of it that has to do with small business assistance, and used to pass the “Don’t ask, don’t tell” repeal.  Bravo Congress.

previously posted here:

Two federal programs that help foster small-business innovation have struggled for financial support this year.  The Small Business Innovation Research and Small Business Technology Transfer programs limp along from year to year on annual authorizations, waiting for lawmakers to get up the gumption to make their more than $2 billion in funding permanent.

An agreement to reauthorize the funding for a year almost coalesced last summer, but then ground to a halt when the Senate and House couldn’t agree on language that might have helped venture capitalists invest and helped more-established businesses qualify for the funding.

We all know money for innovation and research is always money well-spent. New products and new technologies help drive the economy forward again.
So what’s the holdup? Here’s why this vital funding effort continues to flounder:

Too many bigger problems. This has been a year of big-picture thinking — healthcare reform and big stimulus packages. SBIR kind of got lost in the shuffle. Read the rest of this entry »

Although this is an old article, it deserves a reprint as it show the over-burdened regulatory environment of small business and the implications for future growth.

as posted here :

Washington, D.C. Federal regulatory costs on U.S. business grew to $497 billion in 2000. Furthermore, these costs fell disproportionately on small business. These are the primary findings of a study released today by the Office of Advocacy of the U.S. Small Business Administration (SBA).

The report, by W. Mark Crain and Thomas D. Hopkins, entitled The Impact of Regulatory Costs on Small Firms, examines the cost of regulation on small versus large firms across four broad industrial sectors – manufacturing, trade (wholesale and retail), services, and other.

“These research results are very disturbing,” said Office of Advocacy Acting Chief Counsel Susan Walthall. “This new study shows that the cost of federal regulation continues to increase on business and that as this regulatory burden grows these costs disproportionately hit small business.” Read the rest of this entry »

By: Marshall Kirby, Public Policy Analyst

In 2012 new 1099 IRS tax rules for the self-employed and small businesses are set to take effect.  Under the new system, a business will be required to issue 1099’s for purchases and sales to all suppliers, vendors, clients, and contractors paid over $600 in the course of the calendar year (Senator Baucus Wants).  The goal of the new tax law is to bring in those small businesses [including freelancers and individuals] not currently paying taxes on their services (Roth, Tanya).

First it may help to define what a 1099 is.  In the most general sense, 1099 is an IRS tax form which taxpayers and small businesses must file to report income not earned from salaried employment and not subject to Federal payroll tax.  More specifically, it includes stocks and securities, real estate, interest income, cancellation of debt, and, perhaps most pertinent to the small business person, short-term employment contracts and other services rendered.

Originally, this was an idea from the Bush Administration.  The new 1099 provisions have been enacted as part of the Health Care Reform law from earlier this year (Roth, Tanya).  This provision in the law is estimated to raise $17 billion dollars over 10 years, or an average of $1.7 billion a year (Smith, Ned).  Detractors of this amendment have gone on record saying that the changes will be a major detriment to the business environment for contractors, freelancers, and for small firms.

The National Taxpayer Advocate, Nina Olsen, has stated that the increased paperwork and administrative burden this legislation puts on firms “may turn out to be disproportionate” to any fiscal gain created by this policy (Roth, Tanya). Read the rest of this entry »

By: Marshall Kirby, Public Policy Analyst

Mr. Kirby joins The National Puerto Rican Chamber of Commerce with an experienced background in Public Policy Analysis.  He has worked for Americans for Informed Democracy, the Center for US Global Engagement, and for local governments in Virginia on issues ranging from international finance, national security, and other areas of foreign and domestic policy.  He holds a Master of International Development Degree from the University of Pittsburgh.

In the news, a lot of time and coverage has been spent on the issue of taxes and the responsible course of action of spurring economic growth in a recession and balancing real concerns of government deficits when major spending cuts are no longer politically feasible.  In Washington, there is a lot of political rhetoric surrounding tax cuts and tax credits for the middle class and small businesses or whether increasing taxes on the top earners and large corporations will bring relief to the struggling or help pull the country out of the recession.   In Puerto Rico, there are similar talks, especially as the governor has announced a new policy which has left many at odds over the decision.

Luis Fortuno, the young governor of the island, has made a shocking move that has left differing stakeholders at odds.  Read the rest of this entry »

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