Can the Government Really Help Small Businesses?

It seems to me that most people would agree with the following statement: "Small businesses are the job growth engine in this country." You've probably heard it in the office, at the ballpark, or on the nightly news broadcast. It’s accepted as common wisdom; and in today's mindset, that means government intervention will only bring further growth and improvement.

But that raises two important questions: "Do we really know what a small business is?" and "Can the government pick companies that are poised for growth?" As further investigation shows, the definition of a small business is so flexible that the government is able to wrap it around a wide variety of companies. And as the events surrounding Solyndra illustrate, the government is not always able to effectively pick winners and losers.

So we are left with a puzzle: Where does job creation come from and what role should the government have in it? The view from ITR Economics is that there are changes the government can make that will enable more private sector job creation. We'd like to hear your thoughts on this topic, and if you'd like to learn more about this subject, we have explored it in more detail in the upcoming issue of our monthly economic newsletter, the ITR Advisor.