Posts Tagged ‘Buy American’
Made in USA Incentives
Just telling people that it is important to buy products made in the USA should be good enough, but it’s not. I tried. For my Nova company, I always emphasize that all of our products are designed and manufactured in the United States, and, fortunately, companies with Hope that tomorrow is better will usually buy American.
However, if our government really cares that products are Made in USA, then there needs to be some financial incentives.
- Buy American Instant Credit program. I tried this type of program at Nova and it worked until a customer wanted to apply the Instant Credit to something we don’t sell. Ideally this program would be funded by the manufacturer and marketed by the Government.
- Import Tariffs for Countries where balance of trade is not established or not working. For example, we buy technology from them although they don’t buy technology from us. A good example is China. Actually not sure they buy anything from us. Collected tariffs go to our Government and, as a result, increase the cost of an import over something Made in USA.
- Remove Limits from Investment Tax Credits. Currently there is a limit of $500,000. If our economy is suffering, why is there a limit? Why limit investments into the United States?
- Allow Investment Tax Credits to Carry Forward. Why only allow losses to carry forward?
Unfortunately, it is my opinion that any additional incentives for Made in USA would probably be misused by greed inspired entrepreneurs looking to take advantage of a swing back to Made in USA. One thing the recession successfully accomplished was to get rid of US manufacturers that produced poor quality products. The US-based model of producing low quality products doomed to a scheduled obsolescence became the economic model basis for Chinese manufactured products. And Washington actually prefers the shift of poor quality products manufactured in China for a number of reasons, among them is legal accountability. If a Chinese manufactured product kills or maims, you can’t sue! I’ve always found it odd that a company executive without Hope for a Better Tomorrow is more likely to purchase a Chinese manufactured product for their business, although would not purchase a Chinese manufactured automobile for a family member. Why is it that a company executive’s faith in his/her company’s well being so much less?
How often have you heard … if you need production funding, go to a bank? Well, banks and entrepreneurs just don’t work. Banks look for steady growth, and entrepreneurs by definition either grow explosively or die, but steady growth isn’t entrepreneurial. So, where does an entrepreneurial high tech engineering/manufacturer go for funding? Pretty much limited to venture capital. And where do you think venture capitalists go when the economy isn’t good? If you can tell me where they hide, let me know!
One of the most basic obstacles facing high tech engineering/manufacturing US-based companies is lack of capital. I think the feds know that, however their answer shows just how little they know about this business sector. Our government set up an agency called the Small Business Administration (SBA). And guess how this agency doles out money? Through Banks! The SBA claims they are understaffed and as a result depends on the qualification and eligibility programs instituted by local banks to qualify an entrepreneurial company for an SBA loan. Another government system that is broke!
It would be great if our government can figure out a way to directly fund small entrepreneurial high tech engineering/manufacturing companies without depending on banks. Interesting note, one Florida based bank requires a minimum of 3 years exponential growth before even considering a loan application, and by the way, that loan would be with a personal guarantee by the owner or owners of the company. According to the banker, the only companies they have even considered were legal/attorney firms. There’s an example of a service sector business that does well regardless of the economy!
