Economic Mixing Board

Protecting infant industries is important to national defense. It serves several functions, such as: maintaining a technological advantage, ensuring necessary resources are available in the event of a war and preventing monopolies. Trickle Down Politics exploited these factors by offering tax breaks and incentives to businesses, thereby, increase supply and competition to bring prices down and end inflation. Unfortunately, Trickle Down is being utilized when the economy is not inflated. Trickle Down is one of the few economic controls to end inflation. It would be reckless to completely remove the program; however, it might be a good idea to create additional controls and fine tune the process.

Domestically too many companies supply the same or similar products and services. Meanwhile the government is paying a large percentage of business loans and capital losses. Most start up companies go out-of-business in the first or second year. We are paying the remaining 75% of a business loan for 90% of startup companies. This is a huge tax burden when we can increase successful business by limiting eligibility, thereby; decrease the amount of money we spend on failed businesses.

Growing up a neighboring family wanted their son to own and manage a successful business. They gave him money to cover the base amount for a business loan. Three times he declared bankruptcy and stuck taxpayers with the bill before realizing he did not want to own a business. In short, there should be a grace period between accepting business loans, especially when an entrepreneur declared bankruptcy.

Aforementioned entrepreneur, who went bankrupt three times, opened a virtual reality gaming facility. This is unique. It was probably the only one in the city. A friend of a friend invited me to try it out. Advertise by word-of-mouth his friends working at the place are elitist. Walking through the door, a guy flashed the "loser" sign and games were overpriced. As a favor to my friend I didn't share how awful the experience was with everyone. Even as an infant industry a grace period before acceptance could have prevented the third and last bankruptcy.

Infant industries are protected, so even if the company cannot turn a profit, they stay in business. This should be limited to business with fewer than three competing companies in a specified industry and area even if they have government contracts as long as another United States based company exists. There is no reason to bailout companies with over ten competing companies in a regional market. The product is normal and no longer qualifies.

Another way of ensuring success is by analyzing the success or failure businesses in an existing industry. If an industry has high barriers to entry, such as: cost, competition or lack of demand they are listed as ineligible for grants and subsidies. Look at how many insurance and auto loan companies are appearing though the industry is mature.

Having a business license does not make someone a millionaire. It is difficult to breakeven when existing companies are fighting for customers. Cell phone and satellite companies offer free equipment and discounts to gain a competitor's customers. Nothing is free. These come with service contracts so they will breakeven when customers stay with the company long enough to make a profit. These tactics imply the market is competitive and newcomers must undermine existing companies to have any customers.

People are concerned over how many people will lose their job. Customers will go to competing company; ergo, strengthen a comparable company's customer base. With higher demand they will have job openings. This ideal; however, people going into retirement will have difficulty replacing lost income and investment of several years of dedicated work.

This isn't about denying someone an opportunity. It is about denying someone the opportunity to fail. It would be a significantly different matter if the all these companies stayed in business and paid off loans. During a recession we need to be cautious and eliminate unnecessary spending to balance the budget. When the country has more demand than supply, increase the availability of grants and loans to increase supply and reduce inflation. Making a list of eligible and ineligible companies also helps entrepreneurs identify barriers to entry associated. An industry that is ineligible for business loans makes it so entrepreneurs take risks with their own money. This system orchestrates the economy like using a sound mixer. Gradually slide controls up and down until everything works together in harmony.

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