Senate Passes Meaningless "Small Business Bill"

Hooray - the Senate passed a "small business stimulus" bill that will have very little effect compared to the adverse effects they will face on January 1 when their taxes spike.

The highlight of the bill is a $30 billion fund designed to "encourage community banks" to lend to "small businesses." This is simply bizarre. All banks - including community banks - must increase their regulatory capital ratios over the next year or two or be shut down by the Feds. (Some have already done major capital raises but many others will have to do more, if they can.) The other thing banks can do to improve their capital levels is reduce lending when their existing loans get paid down.

So with this bill, community banks will be "encouraged" to lend more - assuming, of course their balance sheet can afford them the chance to do so. Oh, but does anyone in the government think that perhaps if those attractive lending opportunities existed, that the profit motive might be sufficient to encourage them to lend without the government??

Once again, the insane and clueless are running the asylum in Washington...