Floor Statement of U.S. Senator Chuck Grassley

the Fiscal Cliff

Thursday, November 15, 2012

Mr. President,

In less than two months, American taxpayers are set to experience one of the largest tax increases in American history.  With the elections behind us, it is time for us to work together to reach an agreement that can pass both chambers of Congress and be signed by the President.

Reaching an agreement won't be easy, but it must be done to avoid going head first off the fiscal cliff.  By this time we are all aware of the Congressional Budget Office warning that failing to come together threatens to send us into another recession.

An agreement is certainly doable.  But, all we hear about is what revenues Republicans are willing to put on the table.  We need to hear what the President and my colleagues on the other side are prepared to tackle in regard to reforming entitlements that are the long-term drivers of our fiscal problems.

That being said, we will not be able to reach an agreement if the other side continues to insist on punishing entrepreneurs and small businesses in the name of raising taxes on the wealthy.  My colleagues on the other side of the aisle seem to believe that tax increases, particularly on high-income individuals, do not matter.  They argue that raising taxes on the so-called wealthy will return us to the economic growth experienced at the height of the 1990s.

This defies common sense.  If you ask a business owner if raising his taxes will hinder his ability to grow his business, he assuredly will tell you they will.  He understands that the more the government takes from him, the less he has to put back into his business.

This is in line with the general understanding around here that taxes can be used as both a carrot and a stick to affect behavior.  If you want to discourage behavior you impose a tax.  If you want to encourage behavior you provide a tax incentive.

For example, the excise tax on cigarettes has been increased to reduce the number of people smoking.  A tax has been imposed on individuals for not purchasing insurance, so more will.  Our tax code is littered with tax incentives to get people to do more of the things we like and less of the things we don't like.  Individuals and businesses have and do respond to these incentives.

Yet, if we are to believe the other side, when it comes to marginal income tax rates the influence of taxes ceases to exist.  According to them, we can raise income taxes on the wealthy as high as we want with no ill effects for jobs and the economy.

Well, I have news for my colleagues; high marginal tax rates influence many factors that contribute to economic growth.  Capital accumulation and the availability of a well trained labor force are two important factors influenced by taxes.  Just as an increase in the excise tax on cigarettes leads to fewer packs of cigarettes being purchased, increasing taxes on capital reduces capital accumulation.  Likewise, the more you tax labor the fewer hours worked you will get.  In other words, taxes matter.

Some of my colleagues on the other side have pointed to a Congressional Research Service report they claim proves raising the top marginal tax rate does not impact economic growth.  There has been ample criticism of this one analysis that I will not go into here.

But, even if one gives any credence to this one analysis, it must be viewed in light of a larger body of economic research that indicates higher taxes do hinder economic growth.  This research confirms that high marginal rates reduce the hours worked and are a disincentive to small business owners and entrepreneurs.

Among this research is a 2007 study by Christina Romer that found that a tax increase of one percent of GDP reduces economic growth by as much as three percent.  According to this study, tax increases have such a substantial effect on economic growth because of the "powerful negative effect of tax increases on investment."

The last thing we need to do now is discourage business investment.  Business investment has been stagnant.  This has directly contributed to slower economic growth than in past economic recoveries.  It has also contributed to weak job creation and wage growth.

Raising marginal tax rates on entrepreneurs and business owners, thereby reducing their after-tax rate of return is not the answer.  We need to give entrepreneurs and business owners the certainty they need to start investing again.

The Organization for Economic Co-operation and Development (OECD) has issued several reports analyzing how different forms of taxation impact economic growth.  This OECD research found that income taxes significantly impact economic growth.

According to this research, the most damaging tax was the corporate income tax followed by the individual income tax.  The study further noted that highly progressive individual income tax rates are negatively associated with economic growth.

The United States of course relies extensively on both corporate and individual income taxes.  Our corporate rate of 35 percent is the highest in OECD countries, which is bad in its own right.  But a large number of American businesses are taxed at the individual rate, not the corporate rate.  We also already have a highly progressive tax system.  In fact, according to a 2008 OECD study we have "the most progressive tax system and collect the largest share of taxes from the richest 10 percent of the population."

Currently, the top individual rate of 35 percent is the same as the top corporate rate.  Starting in 2013, if the President has his way, the top rate goes up to 39.6 percent with the second highest rate scheduled to go up to 36 percent from 33 percent.  When you consider the effects of the personal exemption phase-out and limitation on itemized deductions, the marginal effective tax rate jumps to over 41 percent.

These tax increases will hinder the growth of small businesses, and of course, slower business growth means slow job growth.

Evidence of this is documented by a 2001 study available from the National Bureau of Economic Research.  This study looked at how the marginal rate cuts in the 1986 tax reform affected the growth of small firms.  The study showed that businesses that experienced the largest marginal rate cuts saw their businesses grow the fastest.  Conversely, the study concluded that when marginal tax rates go up, the growth of small businesses goes down.

Similarly, a 2005 study conducted by the Small Business Administration found that "lower marginal rates on entrepreneurial income encourage more entrepreneurial entry and lower rates of exit, and lengthen the duration of spells of activity."  This means that if my colleagues are successful in raising the top two marginal rates there will be less entrepreneurial activity. Fewer people will seek to start their own business and more current business owners will be looking to close up shop.

Further research confirms that high marginal tax rates leads to fewer hours worked.    A 2008 study that appeared in the Journal of Monetary Economics and a 2004 study conducted by the Federal Reserve Bank of Minneapolis examined how taxes impact the labor supply across time and across countries.

Both these studies found that countries with higher marginal tax rates generally worked fewer hours.  Conversely, those with low marginal rates worked more hours.  In fact, these studies, controlling for other variables, found that the marginal tax rate accounted for the "vast majority" or "preponderance" of the difference in hours worked.

Research by economist Michael Keane has highlighted that high marginal rates have the biggest impact on labor over the long-run.  This is because of the effect of marginal rates on lifetime decisions.

While a sudden increase in taxes may not lead to an immediate shift in current hours worked, it will impact future decisions.  For instance, higher marginal rates will discourage the accumulation of human capital through work experience and training.  His review of research in this area further concluded that the effect of high marginal tax rates is especially pronounced when it comes to women's participation in the workforce.

There are many more examples of economic research that points to high tax rates hindering economic growth.  For the sake of time, I am not going to go through all of them. Instead, I ask unanimous consent to place a list of more than 20 studies in the record.  This is by no means an exhaustive list, but I believe these provide a good starting point for my colleagues who are interested in learning the truth about taxes.

In sum, this research suggests that soaking the rich through an ever more progressive tax code will only reduce incentives for work and entrepreneurship thereby reducing economic growth.  It means that:

-              For a couple deciding whether or not a spouse who left the workforce should go back to work, taxes matter.

-              For an individual who is considering investing in their own human capital through education or training to increase their earning potential, taxes matter.

-              For a small business owner considering hiring employees, purchasing equipment, or expanding their business, taxes matter.

-              For an entrepreneur deciding whether or not a business venture is worth pursuing, taxes matter.

Let me turn to another argument used by my colleagues on the other side to support increasing taxes.  This argument is that tax increases on the wealthy are necessary to reduce the deficit and balance the budget.

The truth is there are not enough so-called rich people to make this happen.  Based on 2009 tax returns, if you raised the top tax rate on income over $200,000 to 100 percent, you would still come short of covering the $1.1 trillion budget deficit for fiscal year 2012.

This back of the envelope calculation assumes that people will not work less or engage in tax planning or fraud to avoid such a confiscatory tax.  I imagine my colleagues on the other side would even concede this would be the case with such a high rate.

For people out there who think they don't have to worry about the President's proposals because you are not wealthy, my message to you is this:  You should be worried, because in order to tackle the deficit and pay for all his proposed new spending, the President will have to increase taxes on individuals well under $200,000.

The President, of course, claims that he wants a balanced approach to deficit reduction.  He says we should do a combination of tax increases and spending cuts.  So far he has been rather specific about his tax increases.  However, he has not said much about entitlements that are going to be the main drivers of our national debt over the coming years and decades.

The President needs to lead in this area to get a serious discussion rolling.  He needs to begin offering serious solutions, not just attacking those that have been offered up by Congressman Ryan in his budget proposal.

Given my tenure in Congress, I have learned to be skeptical when people around here start saying we will reduce the deficit by raising taxes now and cutting spending later.  Especially when no specifics are articulated regarding what programs can be cut or what reforms they will accept for addressing entitlements.  It's been my experience in these situations, the taxes always go up, but the spending cuts never happen.

Professor Vedder of Ohio University, who has studied tax increases and spending for more than two decades, confirms this in recent research.  Professor Vedder looked at tax increases and spending spanning from the end of WW II through 2009 and discovered that  "each dollar of new tax revenue has been associated with $1.17 in new spending."

If we are ever going to get a handle on the deficit, we are going to need to learn to live within our means.  Spending as a percent of GDP has averaged about 20.5 percent since 1970.  From 1998 to 2001, when we did balance the budget, spending as a percent of GDP averaged 18.5 percent.  In fact we have never balanced the budget with spending as percent of GDP exceeding 20 percent.  Spending under President Obama has averaged 24.5 percent of GDP.  We must curtail our spending if we ever hope to balance the budget in the future.

Some around here insist that cutting spending will be as damaging, if not more so, than increasing taxes. They use the rationale of spending multipliers pushed by some economists that suggest for every dollar of spending by the government we will get more than a dollar in economic activity.

This theory is deeply flawed.  Even if we assume the government spends money wisely with no fraud, waste or abuse - and that is a big if - it means one less dollar to be spent by the private sector.

If this was solid economic theory our economy should be booming given all the money we have been spending around here.  The truth is spending is not the solution to our problems, it is our problem.  It is what got us into this mess in the first place.

For my colleagues who are still wedded to the idea that tax increases are preferable to spending cuts, I recommend reading a recent study by Harvard Economist Alberto Alesina.  Given the fiscal shape of many countries, Professor Alesina studied the impact of spending and tax policies put in place to address fiscal imbalances.

His research concluded that "fiscal adjustments based upon spending cuts are much less costly in terms of output losses than tax based ones.  In particular, spending-based adjustments have been associated with mild and short-lived recessions, in many cases with no recession at all. Instead, tax-based adjustments have been followed by prolonged and deep recessions."

This research paper comes on the heels of a paper he released in 2009.  This paper similarly found that policies favoring spending cuts over tax increases are more likely to reduce the deficit.

In the words of Professor Alesina, fiscal adjustments "based upon spending cuts and no tax increases are more likely to reduce deficits and debt over Gross Domestic Product ratios than those based upon tax increases."

These studies confirm what through shear common sense Winston Churchill knew more than a half century ago, "for a nation to try and tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle."

In the coming weeks, I hope to work with my colleagues and the President to reach a bipartisan agreement to help put our country back on sound fiscal footing.  However, as I said in the beginning, it can't be just one side of the aisle that is expected to come to the table.  My colleagues on the other side must be willing to put real reforms to address entitlements and our out of control spending on the table.

I yield the floor.

1.            Alberto Alesina, Carlo Favero, and Francesco Giavazzi. "The Output Effect of Fiscal Consolidations." National Bureau of Economic Research

2.            Michael Keane and Richard Rogerson. 2012. "Micro and Macro Labor Supply Elasticities: A Reassessment of Conventional Wisdom." Journal of Economic Literature.

3.            Michael Keane. 2011. "Labor Supply and Taxes: A Survey," Journal of Economic Literature.

4.            Christina D. Romer and David H. Romer. 2010. "The Macroeconomic Effects of Tax Changes: Estimates Based on a New Measure of Fiscal Shocks," American Economic Review.

5.            Robert Barro and Charles Redlick. 2010. "Macroeconomic Effects from Government Purchases and Taxes," Mercatus Working Paper.

6.            Andreas Bergh and Martin Karlsson. 2010. "Government Size and Growth: Accounting for Economic Freedom and Globalization," Public Choice.

7.            Andrew Mountford and Harold Uhlig. 2009. "What are the Effects of Fiscal Policy Shocks?" Journal of Applied Econometrics.

8.            Alberto Alesina and Silvia Ardagna. 2009. "Large Changes in Fiscal Policy: Taxes vs. Spending" NBER Working Paper.

9.            Jens Arnold. 2008. "Do Tax Structures Affect Aggregate Economic Growth? Empirical Evidence From A Panel of OECD Countries." Organisation for Economic Co-operation and Development Working Paper

10.          Lee Ohanian, Andrea Raffo, and Richard Rogerson. 2008. "Long-term Charges in Labor Supply and Taxes: Evidence from OECD Countries, 1956-2004," Journal of Monetary Economics.

11.          Diego Romero- Ávila and Rolf Strauch. 2008. "Public Finances and Long-Term Growth in Europe: Evidence from a Panel Data Analysis," European Journal of Political Economy.

12.          Donald Bruce and Tami Gurley. 2005. "Taxes and Entrepreneurial Activity: An Empirical Investigation Using Longitudinal Tax Return Data." Small Business Administration Office of Advocacy

13.          Edward Prescott. 2004. "Why Do Americans Work So Much More Than Europeans?" Federal Reserve Bank of Minneapolis Quarterly Review.

14.          Steven J. Davis and Magnus Henrekson. 2004. "Tax Effects on Work Activity, Industry Mix and Shadow Economy Size: Evidence from Rich-Country Comparisons," National Bureau of Economic Research.

15.          William M. Gentry and R. Glenn Hubbard. 2004. "Success Taxes, Entrepreneurial Entry, and Innovation, National Bureau of Economic Research.

16.          Emanuela Cardia, Norma Kozhaya, and Francisco J. Ruge-Murcia. 2003. "Distortionary Taxation and Labor Supply," Journal of Money, Credit, and Banking.

17.          Olivier Blanchard and Roberto Perotti. 2002. "An Empirical Characterization of the Dynamic Effects of Changes in Government Spending and Taxes on Output," Quarterly Journal of Economics.

18.          Fabio Padovano and Emma Galli. 2002. "Comparing the Growth Effects of Marginal vs. Average Tax Rates and Progressivity" European Journal of Political Economy.

19.          Fabio Padovano and Emma Galli. 2001. "Tax Rates and Economic Growth in the OECD Countries (1950-1990)," Economic Inquiry.

20.          Robert Carroll, Douglas Holtz-Eakin, Mark Rider and Harvey S. Rosen. 1998. "Entrepreneurs, Income Taxes, and Investment" National Bureau of Economic Research.

21.          Eric Engen and Jonathan Skinner. 1996. "Taxation and Economic Growth" National Tax Journal.

22.          Nada Elissa. 1995. "Taxation and Labor Supply of Married Women: The Tax Reform Act of 1986" as a Natural Experiment," National Bureau of Economic Research.

Select Assortment Discount Grocer ALDI Opens New Silvis Store November 16

Grocer Keeps it Simple - Shoppers Save Big

Silvis, Ill. - Nov. 16, 2012 - Beginning Friday, Nov. 16, 2012, ALDI will offer grocery shoppers a smarter alternative as the select assortment discount grocer opens its newest Quad Cities-area store, located at 1210 18th Street in Silvis, Ill. The opening marks the addition of the Quad Cities' 5th location, allowing more shoppers to discover the store's premium ALDI exclusive brands and high-quality grocery items at unbeatable prices.

"As ALDI continues to grow in the Quad Cities area, we are pleased to open this new location to help more customers stretch their dollars even further," said Heather Moore, Dwight division vice president for ALDI. "As important as price is, there's only one way to attract and keep shoppers: You have to have quality products. When people try our ALDI exclusive brands, they are surprised by the savings and impressed by the quality."

To celebrate the opening of the new Silvis store, ALDI will host a ribbon-cutting ceremony at 9 a.m. on Friday, Nov. 16, to which the public is invited to attend to sample ALDI exclusive brand products, tour the store and shop for their favorite grocery items. Additionally, guests can enter an on-site sweepstakes for a chance to be one of five winners of a Thanksgiving prize pack, including ALDI gift certificates.

ALDI challenges customers to switch from national brands to its exclusive brands and save up to 50 percent^* on more than 1,400 items the store carries. To ensure its exclusive brands meet or exceed the national brands on taste and quality, ALDI conducts rigorous testing on all products. ALDI stands behind this quality with a Double Guarantee: If for any reason a customer is not 100 percent satisfied with a food product, ALDI will gladly replace the product and refund the customer's money.

A model of efficiency, ALDI eliminates overhead costs by offering smart practices, such as a cart rental system through which shoppers insert a quarter to release a cart and receive the quarter back upon the cart's return. Other cost-saving practices include a smaller store footprint, open carton displays and encouragement of customers to bring their own shopping bags.

ALDI also saves shoppers money by keeping stores open during prime shopping times. The Silvis location will be open from 9 a.m. to 8 p.m. Monday through Saturday and from 9 a.m. to 6 p.m. on Sunday. ALDI accepts cash, debit and EBT cards.

The Silvis location showcases the "new look" of ALDI. With higher ceilings, improved natural lighting and environmentally friendly building materials - such as recycled materials and energy-saving refrigeration and light bulbs - the store will offer customers a simple and easy-to-navigate shopping experience.

A grocery retailer that has grown without merger or acquisition, ALDI opened 75 stores in the United States in 2011 and plans to open more than 80 stores in 2012. ALDI has more than 1,200 U.S. stores located in 32 states.

About ALDI Inc.

Lecanto, FL (November 2012)?November 6 has come and gone, and there's a lot of anxiety around what happens next. This is true of any election. Many people are wondering, What will Obama's reelection mean for job creation, Social Security, healthcare, college tuition, and other hot-button issues? Given the shaky state of the economy, some angst is unavoidable. But Greg Downing says it's absurd to think that whoever occupies the White House for the next four years will seal your fate and make or break your future. "They" can't save you. Only you can save you.

"Never has the phrase 'If it's to be, it's up to me' been more appropriate," asserts Downing, author of Entrepreneur Unleashed: Wealth to Stand the Test of Time (Legacy Unleashed Press, 2012, ISBN: 978-1-938047-06-0, $29.95, www.GregoryDowning.com) as well as an upcoming book on providing a financial legacy for kids. "The blunt truth is that no American can afford to wait on salvation from any politician?or, for that matter, any employer or any teacher in any traditional school.

"The old formula that allowed people to build a comfy middle-class life is gone," he adds. "Instead of obsessing over what you can't control?like who's in the Oval Office, for instance?it's time to focus on what you can control. It's time to make an about-face and learn how to think about work and wealth in a whole new way."

Downing is referring to entrepreneurship. He knows firsthand how dramatically it can transform your life. Once a car dealership manager working grueling 80-hour weeks, he is now a millionaire many times over who takes four months of vacation a year. He made his wealth as a real estate investment business owner and motivational speaker, and he says regardless of the field you choose, entrepreneurship is the only logical path to financial freedom in a global economy where half of all college grads are moving back home jobless and saddled with debt.

First, let's be clear: The entrepreneurship he espouses is NOT the "open your own restaurant and bust your butt working there seven days a week" variety. Rather, it centers on generating multiple streams of income (earned, passive, and portfolio) so that the money you make is not directly connected to the time you spend. ("Time is more valuable than money" is one of Downing's favorite mantras.)

"A single paycheck, even two paychecks added together, is no longer enough to allow a family to live comfortably and provide for the future," he states. "If you're lucky enough to get a good job?and that's a big if?you might be able to scrape by, but you'll work yourself into an early grave. And, of course, if the job goes away, the money stops. It's no way to live?and it's no way to teach your children to live."

Anyone can make the leap to entrepreneurship, and, subsequently, financial freedom, insists Downing. Sure, you may have to learn new practical skills?but mostly it's a matter of changing your mindset. Once you break free of what he calls "middle-class programming," half the battle is won. Here are some of his insights on how to do it:

Commit to changing your life?and don't break that commitment. Most of us do keep our word to others, or at least try to. And of course being trustworthy is critical to your success. (How else will we find investors and get return customers and referrals?) But what about the promises and pacts you make with yourself? Downing says most people are far more likely to break agreements with themselves than they are with others. Yet since becoming an entrepreneur requires a dramatic change in both mindset and habits, you won't get far if you keep letting yourself off the hook.

"It's easy to justify breaking an agreement with yourself because no one will ever know," he points out. "Sometimes we even do it unconsciously. But make no mistake: Your private decision has consequences for both your future and your family's future.

"Breaking any kind of commitment?even those that may seem insignificant?hurts us because our subconscious gets accustomed to our 'crying wolf,'" he adds. "Then, when we want to make a big change in our lives, our subconscious simply doesn't believe us. It will actually work against our success. So when you don't do what you say you are going to do, you are actually giving yourself permission to falter, to quit, and to fail."

Take action now. Don't wait. I'd like to build my wealth. I want to start my own business. It would be great to be in firm control of my financial future. These are nice, positive thoughts, but when they're not paired with action, they are nothing but daydreams. Only action?not plans, not goals, and not ambition?gets results. Every day that you don't take a concrete step forward is another day of the status quo, another day of accepting a mediocre, hum-drum life.

Downing teaches his students to take action toward their dreams each and every day. Even if it's an imperfect action?even if it's later revealed to be an out-and-out mistake?it's still better than letting fear keep you stuck in an unsatisfying life.

"Life rewards action," he asserts. "And yet, most people just keep going through their daily motions, procrastinating, thinking their ideas to death, and never moving forward on them. Every morning, ask yourself, What action can I take today to move toward my dream of financial independence and self-reliance? Then do it, for your own sake and for the sake of your family. Otherwise, one day you'll look back at your life and realize that while you had good intentions, you did not create results."

Remove all unconscious, negative, and scarcity-based programming. Downing says the middle class has been "programmed" with belief systems that weren't designed to help us attain wealth and that, indeed, barely work at all anymore. But because everyone around us is buying into the formula, we assume it's the "right" way. We all have an inner "sheep" that is afraid to go against the herd, that fears it will be punished if it goes against cultural norms. And that's a shame, because while we're staring at the hindquarters of the sheep in front of us, we're ignoring a huge world filled with riches for the taking.

"Today and every day, consciously evaluate and reconsider what works for you as you strive toward a life of wealth and abundance," instructs Downing. "First, think critically about risk and reward, and determine how to effectively balance the two. This involves looking closely at your emotions, your willingness to take action, and your desire to move forward when an opportunity to build wealth arises.

"Often, you'll find that fear, not a rational reason, is holding you back," he adds. "Through this process of evaluation, you'll gradually reprogram your beliefs about the fear of investing, the availability of money, and the lack-mentality that is so common in our society. And as you begin to experience greater rewards, you'll confirm the beliefs and actions that create wealth."

Assume 100 percent responsibility for the results in your life. It's easy to blame disappointments and failures on everything other than ourselves. For instance: "I could be a lot wealthier if the economy hadn't tanked." Or, "How was I supposed to know that there would be a storm and I'd have to clean out my savings to replace my roof?" While it's true that you can't always foresee or control what happens in your life, you can choose how you respond to those circumstances.

"I get it?life has a way of kicking in the door and derailing your plans," admits Downing. "There are bills to pay, problems to solve, and circumstances that need attention. You need to deal with these issues, but you cannot allow them to stop you. Every day, you must make time to move toward the life of your dreams, no matter how small that step is. If you aren't taking steps to change your reality, you forfeit the right to complain about it."

Invest in a financial education program. For decades, American schools have taught (and are still teaching) students that they'll need to give the best years of their lives to employers so that they can retire on 40 percent of their working salary. (That's assuming they can get a good job at all in today's economy, of course.) It stands to reason that if you want more out of life, you'll need to seek some non-traditional education that will help you cultivate the skills that will enable you to generate multiple streams of income.

What those skills are specifically, of course, depends on the field you want to play on. Most likely they'll have to do with acquiring credit, using debt wisely, seeking (and persuading) investors, and marketing your products or services to buyers. Downing's main point is that you shouldn't be afraid to pay for the expertise you need.

"Building wealth takes work, dedication, commitment, and an increased level of knowledge," confirms Downing. "Unless you win the lottery, there is no such thing as getting rich quickly, without any effort, and without spending any money. This doesn't mean getting your MBA. It does mean investing in a real-world education from others who have succeeded in doing what you want to do."

Remain coachable. The annals of history are filled with the tragic downfalls of leaders who got "too big for their britches," refused to consider the advice and expertise of others, and ran their organizations and empires into the ground. Entrepreneurs, by nature, are go-against-the-grain types. It's easy for them to assume they know best and disregard good advice from those who've been there. Don't fall into this trap. Not only should you carefully consider advice, you should actively seek it out.

"The greatest athletes in the world have coaches, and the president of the United States has advisors," points out Downing. "Why would you or I be any different? Other people have done what you want to do and know things you probably haven't even considered. If you seek those individuals out and actively learn from them, you'll minimize mistakes while growing your business as effectively as possible.

"Keep in mind, though, that a true mentor won't just tell you what you want to hear?he or she will tell you what you need to hear," he adds. "Sometimes it'll be uncomfortable, and you'll be tempted to disregard the advice. Don't. Leave your pride at the door and always remain open to learning new ways to approach business problems."

Stop doing minimum wage activities. Our culture puts hard work on a pedestal. From sayings like "If you want the job done right, do it yourself" to the belief that the longer you stay at the office, the better employee you are, it's clear that Americans think that spilling one's blood, sweat, and tears is a noble calling. Not so, counters Downing. If you don't separate yourself from the mundane and the nitty-gritty, you might just micromanage your business away from success.

"You must stop telling yourself to work harder, and learn to work smarter," he says. "It's crucial to understand that the work of an entrepreneur is the work of the mind: thinking, planning, creating, leading, and providing oversight. If you want to reach the highest level possible, you have to leave tasks that can be accomplished by others to those with the knowledge and skills to do them."

Remember that time is more valuable than money. Chances are, you grew up being taught that the way to support yourself and to get ahead in life was to trade your time for money. In other words, if you spend 40 or more hours a week doing what your employer wants, you'll be paid for 40 or more hours. But once those 40 hours are gone, they're gone forever. You'll never get back the time you could have spent playing with your kids or hiking in the woods or volunteering for your favorite charity.

Linking time and earning potential is middle-class thinking, asserts Downing. Of course, you probably can't quit your job tomorrow. You will have to put in some long hours up-front. But eventually you'll have systems set up that allow you to profit from time put in by others and to reinvest your earnings so that you can generate even more income.

"A true entrepreneur understands time is a precious commodity and must be used wisely and efficiently," he explains. "You can and must devote your time to creating wealth, planning and building business systems, and leading your team. Once you have this foundation firmly in place, you'll find you're free of the obligation to work nine to five."

Maintain a credit score of 760 or higher. Your credit score is the gate standing between you and the success you dream of. That's because lenders use credit score ratings to control the amount of money in the marketplace. If they want to increase the flow, they lower qualifying scores. And if they want to decrease the flow, they raise those scores. As an entrepreneur, it's crucial for you to be able to borrow money whenever you need it?regardless of what the market is doing.

"In 2011, the scoring for 'A' credit was raised to 730," shares Downing. "Therefore, you should choose to have A+ credit with a score of 760 or higher. Not only will this score allow you to borrow money any time, it also means that you'll qualify for lower interest rates. Overall, make it a priority to become a master at understanding, evaluating, and controlling your credit score and credit availability so that you'll never find the gate to the resources you need closed and locked."

Stop viewing debt as negative. We've all heard the horror stories: families so sunk in consumer debt they were forced to declare bankruptcy and individuals whose educational debt haunted them for the rest of their lives. In part because of these cautionary tales, we've been programmed to believe the only route to financial freedom is becoming debt-free. Downing says it's time to reprogram that belief.

"It's not that debt itself is bad?it's that the way the average American uses it is destructive," he clarifies. "From this day forward, commit to using debt to invest and build your wealth. Yes, debt can be financial quicksand. But used wisely, it can also give you leverage and make you rich."

Seek to fulfill the unmet needs of others. You may love French pastries and open up a bakery, but if no one in your area craves croissants, your shop will flop. Yes, it's a simplistic example, but the principle behind it holds true: If your business doesn't address and fulfill an unmet need, it's not going to be successful. Period. And in today's highly competitive world with a business on every corner, it's critical to identify what others aren't doing (or aren't willing to do!) so that you can compete and win customers.

"Unmet needs aren't always readily apparent or visible," points out Downing. "To identify them, you need to ask yourself questions like, What problems are keeping my potential customers awake at night? What do they want that they aren't getting? What would make their lives easier? When you have some answers, work on creating a unique approach to delivering that product or service."

Become a master at creating systems and processes. This is all about building a business that runs?and can continue to run?effectively and efficiently. Why? Because you don't want to have to spend your oh-so-valuable time reinventing the wheel and micromanaging others.

"Becoming a master at creating duplicable systems and processes means that you'll need to understand the steps that lead to success, clearly define them, write them down, and explain them to your team," says Downing. "But once you've done all this work up-front, you'll no longer have to run your day-to-day operations. You'll be free!"

Build the right relationships with the right power team members. If you're truly working toward creating wealth, you're not going to be building one small business that you personally operate and run. Instead, you'll be creating multiple, duplicable small businesses that are constantly creating new streams of income for you. You'll need to be able to hand off tasks and duties to others. And that means you'll need a strong team of the right people doing the hard work for you.

"Your power team is the power behind your skill as an entrepreneur," explains Downing. "That's why it's critical to evaluate these people personally and make sure they're right for the job.

"This is also why it's so important to be respectful and helpful to everyone you meet," he adds. "You never know when you'll be making a connection that can benefit you next week, or next month, or next year. They may become power team members and they may also refer customers your way."

Make it a family affair. As you're transforming yourself into an entrepreneur, be sure to instill the same mindset and skills in your kids. This is actually not as hard as you might think. Not only can you narrate what it means to own a business?talking through issues like finding opportunity, understanding revenue and profits, differentiating yourself from competitors, and so forth?your kids can also learn from the best teacher: experience.

"I always advise parents to help their children take typical 'kid jobs' to the next level," explains Downing. "Instead of just being a babysitter or a tutor, for example, kids might start a franchise where they hire out jobs to a database of subcontractors. Or they might invest in some gumball machines. The idea is to let them cut their teeth on critical business principles and see firsthand how they can make money that isn't directly connected to their time.

"Teaching your kids to think about wealth-building in this way is the greatest gift you can give them," he notes. "I believe entrepreneurship is the best way to live. But even if your kids grow up to work for someone else or enter a profession, employers will expect them to work and think like entrepreneurs. It's just the way the world is headed."

Downing acknowledges that some of these tips may seem deceptively simple. But it's their very simplicity that gives them their power.

"Life is really just a series of choices," he says. "We decide whether to watch TV after work or spend an hour on our action plan, whether to take the class or not take the class, whether to hold the cards or place the bet. Most people take the path of least resistance and go with the herd. Those who don't are the ones who will create rich, full lives that are truly worth living."

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About the Author:
Gregory S. Downing has dedicated his life to teaching his students that every family can truly control its financial future and create a generational legacy with profound, yet straightforward advice and guidance. As a nationally and highly respected author, speaker, family expert, and organizational consultant, his advice has been sought and put into practice by thousands of people from all walks of life. With over 20 years of experience in management, leadership, training, and business ownership, he has proven that his principles of legacy parenting, business promotion, entrepreneurship, and real estate investing both work and create bonds of relationship that go beyond the ordinary.

Prior to his writing and public speaking career, he served for 12 years as the general manager of four Chevrolet and Dodge Chrysler dealerships, managing over 130 employees and increasing production and sales without sacrificing quality and customer service while there. It was during his tenure in this position that he became increasingly aware that his gifts and talents were in motivating and leading others to achieve their goals and dreams. He made the transition to motivational and investment training so he could touch more lives and influence others to build wealth and prosperity for themselves and for their families.

To learn more, please visit www.GregoryDowning.com.

Illinois Jobs Now! Financing to Help Additional 500 Families Buy a Home through "Welcome Home Heroes" Program

WESTCHESTER - November 12, 2012. In honor of Veterans Day, Governor Pat Quinn announced the investment of an additional $5 million to the Welcome Home Heroes homebuyer financing package to make homeownership more affordable for more military families. This new Illinois Jobs Now! capital funding will allow an additional 500 military families to access a $10,000 forgivable grant toward the purchase of a new home, as well as a mortgage tax credit worth up to $20,000 over the life of the loan.

Standing outside the home of newlyweds Army Sgt. 1^st Class Eric Sereda, 34, and Sharon Sereda, 27, Governor Quinn emphasized his commitment to help Veterans, active military personnel, reservists and Illinois National Guard members transition to civilian life. Welcome Home Heroes enabled the couple to buy their first home - a three-bedroom ranch home in suburban Westchester.

"As we honor our Illinois heroes on Veterans Day, we are proud to invest in the Welcome Home Heroes program to help those who sacrifice so much buy an affordable home," Governor Quinn said. "The Welcome Home Heroes program offers a secure financing package that protects those who have committed their lives to protecting us. This program helps military homeowners and improves local real estate markets across Illinois."

Since Governor Quinn launched the financing package last December, Welcome Home Heroes has helped more than 550 military families achieve their dream of buying a home. Welcome Home Heroes originally was funded through $5 million in Illinois Jobs Now! capital funds and $5 million from the Illinois Affordable Housing Trust Fund. The additional $5 million investment announced today will stimulate statewide economic activity:

·250 full-time jobs

·$8.4 million from real estate-related industries

·More than $6.7 million in economic activity for the state

·Additional $2.7 million in other statewide spending

Administered by the Illinois Housing Development Authority (IHDA), Welcome Home Heroes is open to all qualified Illinois veterans. Active military personnel, reservists and Illinois National Guard members may also participate, but must be first-time buyers. The Welcome Home Heroes homebuyer financing package includes a forgivable $10,000 grant for down payment and closing cost assistance, an affordable interest rate (3.25 percent as of today) for a secure 30-year fixed rate mortgage and a mortgage credit certificate worth up to approximately $20,000 for the life of the loan. Welcome Home Heroes recently won national recognition from the National Council of State Housing Agencies (NCSHA), which lauded the program's role in empowering buyers such as Sereda.

Previously stationed at a California fort in the Mojave Desert as a combat engineer, Army Sgt. 1st Class Eric Sereda now works for the Army Reserves in suburban Arlington Heights as a career counselor after moving back to the area. A suburban native, Sereda returned to the Chicago area after the death of his father to help care for his family. He thought about renting before learning of the statewide program that could help him.

"We appreciate Governor Quinn tailoring a program to meet the needs of families like us. With the $10,000 down payment assistance, we had extra money to plan our wedding and begin our new life together," Sereda said. "The housing interest rates are so low, and Welcome Home Heroes was just too good to pass up."

Veterans returning home from their service encounter a special set of obstacles to homeownership. Many are underemployed, and while they qualify for job training programs - conventional home loans feature heightened down payment and credit requirements. Nearly one million veteran homeowners face severe housing cost burdens, paying half or more of their income for housing, according to a 2010 American Community Survey analysis.

"Under Governor Quinn's leadership, Welcome Home Heroes will continue to eliminate barriers to homeownership that many Illinois military families face by providing a financial package that is one of the most substantial in the nation," IHDA Executive Director Mary R. Kenney said. "As the state's housing finance agency, IHDA has enabled nearly 60,000 low- to moderate-income families buy a home securely and this investment means we can help even more families."

Under Governor Quinn's leadership, IHDA also is working to increase rental housing opportunities that provide veterans who are at risk of homelessness with access to supportive services and skills that will help them live independently. Of the 700 new units of affordable rental housing that IHDA recently approved, more than one-third of the total units will help veterans and people with disabilities find stability in communities.

"Governor Quinn is a great supporter of our service members," said Maj. Gen. Dennis L. Celletti, the acting Adjutant General of the Illinois National Guard. "He has instituted numerous programs to ensure our returning men and women in uniform have the resources they need to adapt to civilian life and to thrive in this great state."

"I thank Governor Quinn for this new financial commitment to help our military families transition to civilian life and establish roots in our Illinois neighborhoods," Illinois Department of Veterans' Affairs Director Erica Borggren said.

Welcome Home Heroes program builds on IHDA's existing affordable home loan program, SmartMove, also available through IHDA's lenders. The financing package applies to 1-2 unit residential properties located in the State of Illinois that are purchased as a primary residence.

Buyers must qualify based on income and purchase price limits, and can apply for the loan package through an IHDA lender. A list of participating lenders throughout the state is available at ihda.org/homeowner/heroes. For more information about programs for Illinois veterans and servicemembers, visit OperationHomefront.org.

About IHDA

The Illinois Housing Development Authority (ihda.org) is an independent, self-supporting bonding authority that finances the creation and preservation of affordable housing throughout Illinois. Since 1967, IHDA has allocated more than $11.1 billion to finance more than 221,000 affordable housing units for the residents of Illinois.

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