This morning's LA Times (paper edition)  led with an article, "Economic Fears Rise as Stimulus Ebbs."  Here we go again.  Articles like these underscore the fact that no one seems to understand the economics of growth and job creation. One business owner is quoted in the article as saying that his biggest job this year was a stimulus project repairing a pipe at the Veterans Administration building.  "My company's on the verge of closing," he said. About $18 billion of California's stimulus funds have been spent on Medicaid, unemployment insurance, food stamps, schools, and job centers.  I'm sorry, where is the job creation?  Can you imagine what a bunch of entrepreneurs could have done with that $18 billion?

Entrepreneurship has been responsible for job creation that is disproportionate to the total net new jobs created in the U.S. over the past 25 years.  Small business (which the SBA defines as under 500 employees - yes, that hardly seems small unless you compare it to the nearly 20,000 employees that Google has) accounts for 99.7 percent of all employers and they have generated 64 percent of net new jobs over the past 15 years. (www.sba.gov/advo/research/rs299tot.pdf)   Of course, it's important to point out that only 5 percent of these "small" firms accounted for three of four of those new jobs. These are the fast-growth entrepreneurial companies such as Demand Media and Method Home that create hundreds of new jobs and actually produce something that can be sold around the globe.

But here's the point: that business owner with the construction company shouldn't be sitting around waiting for the taxpayers (aka the government) to give him work.  Yes, it's nice to repair bridges and other infrastructure, but those dollars will not create sustainable jobs. And by the way, have you ever watched workers on government projects?  It generally takes three workers to do one job.  You won't find that lack of productivity at an entrepreneurial company.  In start-ups, everyone does two or three jobs.  The government needs to get out of the way and make it easier for entrepreneurs to do what they do best: innovate, build, and create jobs. That's the only way we can assure a strong economy going forward.