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A *Rounding Error* and a Spark for Economic Recovery

The numbers put forth by the current and incoming administrations for a bailout plan are staggering.  But what will it take to *spark* the economy and get it chugging along once again?   Do we bailout an industry drowning in union related pork?  Do we buy up people's homes?  Public works projects?  Perhaps... but let's not forget what has been the driving force behind of economy's sails for decades.  It is the innovation of America's entrepreneurs and the jobs created by their early stage companies. 

Unfortunately, as a highly capable and intelligent friend (and Venture Capitalist) has pointed out.... the winds have dissipated (that's being kind), funding has dried up, and the VC community is anticipating a very chilling funding environment in 2009.  

These start-ups are dying on the vine right now.  They started running on fumes months ago and many have let their staff go and closed their doors.  Others are hunkering down, trying to weather the storm---but certainly are not innovating or hiring new talent.

These start-ups are typically not very capital intensive--- given the hundreds of billion of dollars the government is going to spend on a bailout, a mere *rounding error* on the part of the treasury dept could fund the entire capital needs of a host of innovative start-ups, and help provide the spark the economy needs.

Posted on Wednesday, December 24, 2008 at 02:56PM by Registered CommenterHoward J Luks, MD | CommentsPost a Comment

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