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7

August

2011

Debt Deal Reached in the 11th Hour – Now What Does My Small Business Do? :

Congress and the White House reached an agreement in the 11th hour to sign into law a plan that will 1) raise the debt ceiling to avoid negatively (and drastically) affecting our government’s credit rating, 2) begin a 10-year $2.1 trillion spending-cut plan and 3) create a Congressional committee to come up with long-term deficit-reduction suggestions.

But what will this mean for your small business? According to John Arensmeyer, CEOI the advocacy group, Small Business Majority, the answer is essentially “not much.” The deal was a good thing that it avoided a catastrophic default, but it seems to have missed the mark to make real reforms that would have benefitted small businesses, says Arensmeyer.

No big changes in tax cuts are coming. Interest rates will stay about the same. But what has changed is the severity with which this debate was covered. With so much back-and-forth reporting of plans, changes, rejections, votes and press conferences about whether or not to raise the debt ceiling, there has been notable concern whether or not the plan will actually bring big changes. Since the consensus is that drastic changes are not coming, then it’s best to just focus on doing what you’re already doing to promote your business and increase sales.

This isn’t the time to be thinking you need to be ahead of some imaginary curve or change a game plan that works for you. It’s time to relax and not get carried away by incessant media hype. Remember that the U.S. Government debt ceiling has been raised 74 times since March 1962, and 10 of those times have occurred since 2001. The debt ceiling has shown to be ineffective in controlling Congressional spending, but the media (and all political parties) like to use it as a lightening rod sometimes. But you’re smarter than that.