[Related to the Apply the Concept on page 184] While
running for president, former Secretary of State Hillary
Clinton published a position paper outlining how, if
elected, she would make it easier to start a small business.
One of her proposals was:
Any state and locality willing to make starting a business cheaper and easier and meaningfully streamline unnecessary licensing
programs will receive federal funding to support innovative programs and offset forgone
licensing revenue.
a. Why might this proposal be expected to increase the
rate at which small businesses are formed?
b. Given your answer to part (a), why did state and local
governments pass such licensing requirements in the
first place?
Source: “Hillary Clinton Will Make Life Easier for Small Business at
Every Step of the Way,” hillaryclinton.com, August 23, 2016.