I would like to start by saying that I agree 100 percent with my blog-mate Kathy Allen's last post: It's the private sector, st...d! This so-called economic stimulus plan has become just another boondoggle -- welfare for an ever-growing list of special interests with cozy Congressional relationships. As soon as this river of cash runs out (which it apparently now has), then of course the result will be economic contraction. It's no coincidence that the economic term "double-dip inflation" is suddenly gaining increased attention in the press.

However, while I agree with Kathy on the undeniable importance of the private sector for job creation, I'm not so sure I agree that it's small businesses that make the difference. Instead, according to a recent publication sponsored by the Ewing Marion Kauffman Foundation in Kansas City, it's the age of the firm that counts, not its size.

Quoting from the publication's abstract, "Until 2005, we knew that from 1980-2005, nearly all net job creation in the United States occurred in firms less than five years old. This data set also shows that without startups, net job creation for the American economy would be negative in all but a handful of years. If one excludes startups, an analysis of the 2007 Census data shows that young firms (defined as one to five years old) still account for roughly two-thirds of job creation, averaging nearly four new jobs per firm per year. Of the overall 12 million new jobs added in 2007, young firms were responsible for the creation of nearly 8 million of those jobs."

Okay, I know I may be splitting hairs here, as many young businesses are also small businesses. But I think it's important to consider that there isn't something inherently magical about the notion of a small business versus a large business -- either can be large net job creators as well as large net job destroyers. However, there clearly is something inherently magical about companies that are younger than five years of age. Whether large or small, it is these innovative and energetic young companies that are the best hope for our future economic growth.