Many Private Business Owners Strongly Oppose Raising The National Debt Ceiling
Written by Tim Morral
In a study conducted by Pepperdine University, the business community indicated frustration with the government's approach to debt and other economic variables.
In a recent survey, only 33% of business owners expressed support for raising the national debt ceiling in 2012 -- and 45% indicate that the federal government should never raise the debt ceiling.
The survey of more than 3,000 private businesses (part of the 2012 Economic Forecast conducted by Pepperdine University's Private Capital Markets Project and Graziadio School of Business and Management in partnership with Dun & Bradstreet Credibility Corp.) comes in the midst of President Obama's request for Congress to increase the debt ceiling by an additional $1.2 trillion.
SMB owners almost universally agree (96%) that the government should decrease federal expenditures to balance the budget, with a mere 23% reporting the raising of additional revenue through personal income taxes as a viable budget strategy.
Business owners' insistence on the value of cost-cutting and budgeting efficiencies isn't surprising. Throughout the economic downturn, many SMB owners have leveraged budgeting tools and other strategies to achieve cost efficiencies and bottom line improvements.
"Only one-third of the small and medium sized privately-held businesses feel that we should continue to push the country further into debt, with the remainder calling for reductions in government spending," said Dr. John Paglia, lead researcher for the Pepperdine Private Capital Markets Project and associate professor of finance at the Graziadio School of Business and Management.
"Small businesses have endured the difficulties of the recession and understand how to work within the bounds of a budget. The results clearly show that small businesses think it is time to stop taking on more debt and start cutting expenses."
Despite the opinions of business owners, columnist Paul Krugman sagely points out that debt is not to blame for current economic woes. Taking on debt is fine. It just has to be spent on the right things, such that economic growth overshadows and outpaces the growth of national debts.
For business owners, the best recipe for economic growth may be to stop overspending in areas like defense and instead make money available to business owners themselves, so that they can fuel economic growth. Indeed, the Pepperdine survey shows that 30% of business owners see increased access to capital as the most important prerequisite for job creation.
"The data show that small businesses are poised for growth and ready to spend," said Jeffrey Stibel, Chairman & CEO of Dun & Bradstreet Credibility Corp., "but small businesses continue to be choked by corporate and policy environments that restrict their access to capital. Until these businesses have the funds to grow, it will be almost impossible to revive the American economy."
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