After squandering half of his term in the Oval Office and most of his political influence hammering a healthcare reform bill through Congress that the vast majority of Americans did not want or need, the President blaming anyone but himself for the economy seems absurd. The convoluted healthcare reform is a major factor in the collapse of new business start-ups.
A new survey shows that start-up activity plummeted in the first half of 2010 and that is very bad news for the faltering economic recovery. The willingness of seasoned professionals to strike out on their own is clear indication of their lack of faith in the future of the American economy as well as emphatically shuts down the outlook for productive job creation in the foreseeable future. New business start-ups are the real powerhouse in job creation and offer the greatest potential for upward mobility to the truly talented employees that are lost in the bureaucracy of big firms.
The sweeping health care reform bill signed into law by President Obama last march holds several stark discouragements to would be employers starting new companies. Most notable among these include:
A requirement that companies with 50 or more employees must offer coverage to employees or pay a minimum $40,000 penalty if just a single employee receives a health care tax credit.
Employers who offer coverage but whose employees qualify to receive tax credits will pay $3,000 for each worker receiving a tax credit.
What is keeping even the most aggressive business mavericks on the sidelines is not what they know about the new law, but what is still up in the air. There are hundreds of ambiguous caveats in the law which are left to the “discretion of the Secretary of Health and Human Services” and no one, including the Secretary of Health and Human Services, knows how all those vagaries and variables will impact them.
With many Americans reeling from a 25% decline in their property values or a foreclosure and their consumer credit maxed out, the usual consumer spending savior of the US economy has little hope of coming to the rescue this time. Contrarians who might stick their neck out on a new business venture even with the economy faltering are keeping their heads safely tucked in their shells because Obama’s health care reform is a guillotine.