After much debate, HR5297, the new jobs bill was recently passed by Congress.  Most of the $787 billion price-tag is directed at small businesses — via the Small Business Administration Loan program- which experts say hire the largest percentage of workers in this country.  Of course, there is also $20 billion thrown at highway and mass transit programs as well…

Is this truly the panacea for an unprecedented high unemployment rate and a country on the brink of recession?  Or, is it merely a “mini-TARP” — more crushing debt for this and future generations to deal with?

The Small Business Administration (SBA) gets $730 million to enhance current programs and help unlock credit markets thereby increasing liquidity to small companies.  Tax breaks and write-offs to incentivise hiring and purchasing of equipment, combined with an expansion of new and existing programs are designed to provide financial opportunity and access to a credit market that has locked up.

The theory is, that these provisions will impact Main Street, unlike the previous stimulus bill which impacted Wall Street.  The bill injects $30 billion into community banks to provide capital backing more lending.  More loans mean lower interest rates.  More borrowing means more business, more buying and more hiring.  Everybody wins, right?

SBA loan fees decrease, guarantees increase.  The agency guarantees debt that matches certain criteria, which therefore decreases risk for lenders and investors. There are tax credits, breaks and incentives for small business.  Deductions and depreciations are increased.

If it sounds too good to be true, is it?

Opponents call it a “debt bill” vs. a “jobs bill.” Can you really get people back to work in this nation by loading more and more debt on for generations to come?  In addition, last year when the SBA lending was expanded, it ran out quickly creating a backlog of requests that still need to be addressed before dealing with the flood of new requests.  Meaning, it could be a very long time – at best – before Main Street sees much improvement from this bill.