Small Businesses Rejoice! Obama Has Saved You

President Barack Obama has signed a $30 billion bill that provides tax cuts to small businesses and endeavors to help small businesses borrow money. The thinking goes that tight credit markets have made it hard to get loans, and government intervention can help. The jury’s still out as to the merits of this idea, since some believe that banks aren’t lending because small businesses don’t want to borrow when a soft job market is dampening demand.

In any case, the new law allows small businesses to write off the first $500,000 they spend on new equipment purchases. Some new businesses will face no capital gains taxes on long-term investments in their companies.

The White House says the Small Business Administration will extend existing loan provisions to provide $680 million in new financing to 1,300 small businesses that are waiting for loans. It will also allow the SBA to expand the size of the loans it makes and implements a small business lending fund that will give $30 billion in capital to small banks in the hopes that they’ll expand small business lending.

Democrats hope the law will create somewhere in the neighborhood of half a million jobs. It’ll be hard to tell whether the law will achieve that goal, because we don’t have access to an alternate universe where the law never was signed. But with any luck the economy will improve somewhat, regardless!