By: Todd Smekens
NEWS – Shortly after publishing today’s article about our crumbling infrastructure being a war against the working class, Governor Holcomb announces his idea of stealing $500 million from toll road trust fund to use for seed money to “spur innovation” by loaning money to small and medium-sized companies in Indiana. He wants to “make Indiana an innovation hub”. This might sound like a great idea, but why are we using money that should go to rebuild our crumbling infrastructure on risky businesses that fail more often than not?
Let’s remember that our new Governor has already been quoted that he’ll be, “governing based on facts”. Yet, his announcement of spending $1 billion dollars on losing propositions doesn’t sound like a leader with any knowledge of data or business acumen. And why gamble with taxpayer money when this is exactly what banks and venture capitalists risk their capital to make money.
For instance, what does the data say about his bet? What are the likely returns? According to Bill Carmody at Inc. Magazine, “96% of businesses fail within the first 10 years”. Yea, what does Bill know?
Turns out it’s a rule of thumb based on decades of reality. According to the Small Business Administration – The SBA – close to 66% of small businesses will survive their first 2 years. What that means is that only about one-third of total businesses will fail during the first 2 years. The SBA also tells you that about 50% of businesses fail during the first year in business.
Therefore, if our governor is really a man who makes decisions based on data, why is using our money on risky bets? Why not use the $500 million on roads where it’s needed? Taxpayers have already been paying for road repairs that weren’t being done. This much we already know.
According to today’s article by Haleigh Columbo, “Holcomb plans to ramp up the investment capabilities of the Next Generation fund, which is run by the Indiana Finance Authority, and set up an investment board to run it. The Indiana treasurer would remain the trustee of the fund, which would be called the Next Level Indiana Fund.”
She goes on to write:
Other parts of the $1 billion entrepreneurship plan remain as discussed in the summer. Holcomb’s team would also invest $20 million in the Indiana Biosciences Research Institute, $4 million per year on the Regional Cities Initiative program, and $10 million per year to support entrepreneurship-focused programs at higher education institutions.
Hint, hint…Ball State just received a $3.25 million investment from the Koch brothers to build an entrepreneurial center to teach neoliberalism, I mean free market propaganda to other professors. It’s an indoctrination program into laissez-faire capitalism. It’s what has destroyed the working class in America and beyond.
Holcomb is taking money from a fund setup by selling our toll road, and using that money to invest in businesses that mostly fail. Not only is he taking money from taxpayers, his predecessor cut taxes on the donor class. In Maureen Hayden’s article we referred to in my other post, she writes:
Lanane said pro-business Republicans should halt a series of cuts signed by outgoing Gov. Mike Pence that are costing millions of dollars in lost tax revenues.
Those include cuts to the personal income tax rate from 3.4 percent to 3.23 percent, a reduction in the corporate income tax rate from 7.5 percent to 4.9 percent, and a repeal of the state’s inheritance tax.
In the current budget year, those cuts reduced state revenues by $630 million, according to Purdue University economist Larry DeBoer, an expert in state and local finances.
So, with all the money flowing to the rich donor class, who gets to pay for the roads?
You don’t really need an accounting degree to account for which direction the money is flowing and who’s getting richer and who’s getting poorer. They’re robbing us blind, and we keep voting them into office. Until the working class realize they’re being duped by Oligarchs and the politicians (servant class), our lot in life will not improve.