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I haven't spent this much time thinking about economics since college, when it was my second major. I have dedicated the last 15 years primarily to my first major, computer science, and my first love, entrepreneurship. But that has changed in the last six months, although my primary concern still remains entrepreneurship.

I was invited by Tim Kane and Bob Litan of the Ewing Marion Kauffman Foundation, the world's largest foundation dedicated exclusively to the cause of promoting and fostering entrepreneurship, to a small conference of economics bloggers held in Kansas City recently.

About 30 of us spent a stimulating day--and two dinners--discussing the current crisis, the path forward, policy issues and a variety of other topics. (Read "Reconnecting With Economics.")

A growing concern is the current lack of policy to support entrepreneurship from this administration, especially bootstrapped entrepreneurship. As the government tries to assess what might stimulate entrepreneurship, I don't see many "practitioners" of true entrepreneurship represented on President Obama's advisory council. Who represents the voice of the bootstrapped entrepreneur in the government? Who understands the extreme cash-strapped conditions under which entrepreneurs operate? Without understanding, how can they design an effective system?

Yet, we're constantly wrapped around the axle of venture capital as the primary driver for entrepreneurial growth. President Obama has a few venture capitalists around him, including John Doerr. But Doerr has never been a practicing entrepreneur, especially not a bootstrapped entrepreneur.

In fact, this week, there was some whining from the venture capital industry about a tax increase for carried interest per the Obama budget proposal. The administration proposes raising taxes on these firms' general partners by treating carried interest, the portion of profits they take from successful investments, as ordinary income instead of capital gains. That change would increase the tax rate, starting in 2011, to 39.6% from the current 15% level.

My first reaction when I read this was, "What carry?" Most venture firms have had negative returns in recent years! But on a more serious note, my reaction is that there is some legitimacy to this proposal. The VCs are outrageously overcompensated as it is. (Read "VC-Entrepreneur Compensation Disbalance.")

There is no reason to give them additional tax breaks, unless they truly participate in risk taking, and they're not doing that these days. What we need to incentivize is the very early stage entrepreneurship and investment process, which comes primarily out of the entrepreneurs' own pockets and those of friends and family and angel investors. (Read "Stimulus Package for Entrepreneurs.") To the extent VCs should have any incentive via low capital gains taxes, I would offer that only to those who practice the high-risk art of true early stage venture capital, not en masse. My recommendation is a two-tier capital gains tax structure, which President Obama may consider to achieve some of the same results, but without choking up the growth engine.

An aspiring entrepreneur ought to be allowed to create a tax-free pool of income for use as personal venture capital. Such a pool of capital would go a long way to help kick-start new ventures.

Most entrepreneurs--especially first-time entrepreneurs--don't have access to such high net-worth people. They raise money from friends and family. Thus, the government should be very careful how a $400,000-a-year uncle is treated from a tax policy point of view. The choice may well be between $250,000 being invested in a start-up, versus that $250,000 going into the government's pocket as income tax. Furthermore, angel investors should also be allowed to create pools of tax-free capital for investing in start-ups.

Variations on this thinking have been implemented in certain states like Arizona, Oklahoma, Indiana and a few others. In fact, InfusionSoft Chief Executive Clate Mask wrote on my blog: "A couple years ago, our business was the beneficiary of a state program in Arizona that gives angel investors a state tax credit on their investment in a 'qualifying small business.' For our company, this credit was just the nudge several angel investors needed to go forward on an investment in our company. We raised about $400k from those angels. Today, we have about 140 employees, our business is excelling and our investors got their state tax credit."

Arizona offers a 30% tax credit to angel investors, but they have to be residents of the state to take advantage of the program. Mask believes a federal version of such an incentive structure would be much more effective so that entrepreneurs may be able to attract investors nationwide.

These are complex issues that require careful consideration from the Obama administration in order to design a properly functioning growth engine. For that, the president needs to first decide that entrepreneurship is a major issue that he cares about, and not just something he gives lip-service to. Then, he needs to recruit an advisory council made up of bootstrapped entrepreneurs, not venture capitalists or super high net worth investors. This will be the key to spawning a million small businesses that employ 10 million people--or more.

And therein lies the engine of growth now silenced by the $20 billion flushed down into General Motors' (nyse: GM - news - people ) bottomless abyss.

Sramana Mitra is a technology entrepreneur and strategy consultant in Silicon Valley. She has founded three companies and writes a business blog, Sramana Mitra on Strategy. She has a master's degree in electrical engineering and computer science from the Massachusetts Institute of Technology. Her first book, Entrepreneur Journeys (Volume One), is available from Amazon.com.

President Obama's health care budget plays to nearly every type of constituent.

There is $6 billion set aside for cancer research and more than $70 million to improve access and quality to health care in rural areas. He's allotted $330 million to address chronic shortages of health care professionals. Even autism disorders and teen pregnancy prevention are earmarked to receive extra dollars.

But more likely to affect consumers directly are proposed changes to Medicare, the government program that provides health coverage to 37.6 million Americans over the age of 65.

Changes to Medicare, including the elimination of no-bid private plans, are expected to net a savings of $316 billion in the next decade.

These savings, combined with $318 billion in revenue generated from a tax increase on individuals and families who earn more than $200,000 and $250,000, respectively, make up a $634 billion so-called down payment on expanding health coverage to millions of uninsured Americans.

The end goal, according to administration plans released last week, is to simultaneously improve access and quality of care while containing the cost. (Currently at $2.1 trillion, health care spending accounts for 16% of the nation's gross domestic product.)

"I don't see anything in the budget that would lead to a reduction of quality of care," says Karen Davis, president of the Commonwealth Fund, a private foundation that supports health care research. "It's driven by rewarding providers who [are more efficient] and targets excesses."

The deal must be approved by Fortis (other-otc: FORSY.PK - news - people ) Holding shareholders, possibly on April 8 and 9.

The sale of Fortis Bank to Paris-based BNP Paribas (other-otc: BNPQY.PK - news - people ) was first concluded last October at a value of euro14.5 billion ($18.3 billion). But disgruntled shareholders of Fortis Holding won a court ruling saying the government had no right to sell the bank without consulting them.

Under the new deal, BNP Paribas will take a 75 percent stake in Fortis Bank and 25 percent of Fortis' insurance activities in Belgium. The government retains a 25 percent stake in Fortis Bank and Fortis Holding will continue to hold 75 percent of the insurance business.

Fortis shares traded at euro1.04 Friday, valuing the company at only euro2.4 billion ($3 billion).

The deal adds Belgium to BNP Paribas' market. It currently has no presence in the country.

Premier Herman van Rompuy and Finance Minister Didier Reynders concluded negotiations with BNP Paribas chief executive Baudouin Prot early Saturday, several hours after a midnight deadline had passed.

Lloyds Banking Group has become the latest U.K. bank to fall under government control since the run on Northern Rock in September 2007.

The U.K.'s third-largest bank confirmed Saturday that the government is raising its stake to at least 65%, and possibly as high as 77%, in return for insuring $367 billion dollars in toxic assets. The bank has also promised to increase its lending, primarily to businesses, by $39 billion over the next two years.

The increased stake will come about by the government converting its $5.7 billion of preference shares paying 12% into new ordinary shares.

"Participating in the government's Asset Protection Scheme substantially reduces the risk profile of the group's balance sheet," said Chief Executive Eric Daniels in a statement. "Our significantly enhanced capital position will ensure that the group can weather the severest of economic downturns and emerge strongly when the economy recovers."

Lloyds (nyse: LYG - news - people ) will bear up to the first $35 billion of any losses and will pay a fee of $21 billion to $23 billion to the government to participate in the scheme. Discussions to bring Lloyds into the arrangement have been underway for several days (see "Lloyds May Land In Her Majesty's Lap").

The bank says the toxic assets covered by the governments insurance are expected to include residential mortgages ($105 billion), unsecured personal loans ($26 billion), corporate and commercial loans, including commercial real estate and leveraged finance loans ($214 billion) and treasury assets, including the group's Alt-A portfolio ($24 billion).

Eighty percent of the assets come from HBOS, which Lloyds agreed to buy in a government-brokered deal in September 2008. HBOS reported $14 billion of loan losses last year, up fivefold from 2007 (see "Lloyds Lands HBOS Bombshell").

Lloyds' share price fell 31% in London trading in the past week on rising concerns about the bank's ability to absorb the losses at HBOS.

Even ultra-rich consumers are avoiding stores like Saks and Neiman Marcus. Will they be back?

Software is supposed to be a mature industry, characterized by some sort of mono- or duopoly. How to explain, then, the activity around Web browsers: Three of the tech industry's biggest names--Microsoft, Google (nasdaq: GOOG - news - people ) and Apple (nasdaq: AAPL - news - people )--each has a significant in-house browser development effort, with periodic fresh releases. Then, of course, there is the Mozilla Foundation, the folks behind the popular open-source browser Firefox.

Competition is always good, but especially these days with browsers. Features are being added to them that may, in a year or two, make a browser-based application look and feel no different from a desktop one. Imagine having the equivalent of Photoshop or PowerPoint in your browser--and thus available on whatever machine you happen to be using, desktop or smart phone or laptop.

The coming evolution in browsers is akin to the Ajax phenomenon of recent years. Ajax is a name given to a quartet of programming technologies that collectively made possible the likes of Google Maps and Gmail.

Before Ajax the typical Web site was a collection of static pages. With Ajax, programmers were able to change only part of the screen, displaying, for example, different information as you move a cursor around on a map. Ajax also allowed Web pages to be more dynamic in other ways, letting users, say, right-click and see a menu tailored to their needs.

The components of this new browser programming paradigm are esoteric. One is a new, extra-speedy Javascript interpreter, found in the latest browsers from Google and Apple, that allows programs in the browser's standard language to zip along faster than ever thought possible. Another is an Apple-created graphics technology known as Canvas, which gives programmers much more freedom using text and drawings.

Other under-the-cover changes include giving browsers the sort of sophisticated software-control features usually found only in operating systems. Web Workers, for instance, is an emerging system for isolating a browser's individual tasks into separate "threads," making it easier for a browser-based program to perform a computationally intensive task such as photo-editing in a background tab while the user is attending to something else, like e-mail, in the foreground.

This new approach to programming doesn't yet have a handy name like Ajax, though some refer to it as HTML 5. No browser yet has all of these new elements. Apple, Google and Mozilla have pieces. All are competing to add more.

So far there are no Google Maps-style killer apps for this new programming approach; indeed, programmers are just beginning to wake up to the possibilities. But one modest example is an early version of the sort of text editor used by engineers for writing computer programs. It's at bespin.mozilla.com and works with the Mozilla browser, Firefox.

Ben Galbraith and Dion Almaer, the Mozilla engineers who developed the site, said it will be expanding into a full-blown "programming environment" for the new software approach, but one that itself uses the same technologies that programmers will be making use of to build other applications. In a year or two, they say, software will be available that is indistinguishable from traditional desktop programs. The two men helped chronicle the Ajax movement; Galbraith said the new tools "have us more excited than we were for Ajax."

Many people assume that browser-based programs would run "in the cloud," that is, on servers situated remotely at companies like Google or Amazon. But Almaer said there's no reason software has to be written that way. A photo-editing program based in a browser, for instance, could run entirely on your desktop. PCs have power to spare.

Who wins and who loses with this new approach? Adobe (nasdaq: ADBE - news - people ) might not look too kindly upon it. The maker of Flash software would prefer that programmers stick with its software. Microsoft usually doesn't warm to standards it can't control; it is also pushing its new Silverlight multimedia program, which performs some of the functions of HTML 5 software.

Apple, Google and Mozilla, by contrast, favor anything that curbs Microsoft's market position. The three cooperate in browser development even as they compete for market share. If the day arrives when a browser is the only program anyone needs, those three would be among the ones cheering loudest.

Senior editor Lee Gomes covers technology from our Silicon

Shares of some top computer companies are mixed at 10 a.m.:

Apple (nasdaq: AAPL - news - people ) Inc fell $1.90 or 2.1 percent, to $86.94.

Dell (nasdaq: DELL - news - people ) Inc rose $.14 or 1.7 percent, to $8.53.

Hewlett Packard (nyse: HPQ - news - people ) fell $.36 or 1.3 percent, to $26.72.

IBM (nyse: IBM - news - people ) fell $.77 or .9 percent, to $86.71.

Lexmark rose $.10 or .6 percent, to $15.90.

Copyright 2009 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed

March 2, 2009

The future of General Motors has been called into question. On Thursday, a regulatory filing revealed that accounting firm Deloitte & Touche, the company's auditors, have "substantial doubt" the disturbed automaker can stay in business.

General Motors (nyse: GM - news - people ) confirmed Tuesday that it's nearing a resolution for its parts marker Delphi, which has been floundering in Chapter 11 bankruptcy protection since 2005. (See "GM Steering Delphi Out Of Chapter 11.")

Shares of GM fell 12.7%, or 28 cents, to $1.92, in early-morning trading. Over the past year, its stock value has lost 91.7%.

GM recently received $13.4 billion in federal loans, and it's hoping for a total of $30.0 billion. During the past three years, it has piled up $82.0 billion in losses, including $30.9 billion in 2008.

Deloitte & Touche attributed its warning to recurring losses from operations, stockholders' deficit and an inability to generate enough cash to meet its obligations.

GM said that its future depends on successfully executing the viability plan submitted to the government in February to justify the loans. "If we fail to do so for any reason, we would not be able to continue as a going concern and could potentially be forced to seek relief through a filing under the U.S. Bankruptcy Code," the company said in the annual report.

The Associated Press contributed to this article.