[quote=gary_broker]Your understanding of how credit is used by business is limited.. you need to broaden your view. Comparing a company’s need for credit (especially a small company) to you blowing your wad on beer and not being able to make rent is not an accurate analogy.

I own a fashion co. that uses and relies on credit all the time. In business when opportunity knocks you have to take advantage of it. This means sometimes borrowing to fill large orders and yes even occasionally borrowing to make payroll.

Effective small business owners are ballsy and do what they have to do bring in profits and keep their staff employed. If the credit dries up the result will be larger companies with deeper pockets capturing more market share while small businesses lay people off and go under.[/quote]

Businesses that depend on debt are definitely going to suffer in this environment. But that’s not such a bad thing necessarily. It’s healthy for the economy to purge marginal and inefficient businesses occasionally.

In any event, even if it were desirable to continue making short-term loans available to small businesses, I don’t see how buying $700 billion in bad mortgage debt is going to help. If the underlying assets being borrowed against are overvalued, banks are still going to be reluctant to lend. The only way to fix this crisis is to allow asset prices to get back to their natural levels. All of this interference by government is just pushing that day further into the future which is just going to prolong the crisis.