On Wednesday, the country reached a sad milestone: Inflation under President Biden hit 20 percent. The value of the dollar has plummeted under his leadership. The Bureau of Labor Statistics also confirmed that the consumer price index is resurgent and growing faster than average wages. Combined with weak GDP growth, these data show that the US economy is slipping back into stagflation.
Historic inflation is causing a decline in living standards and a cost of living crisis. Under Biden, grocery prices have risen nearly a third, and gasoline has risen 50 percent. Every daily convenience, from a turkey sandwich to a handyman’s help, seems to have increased by 50 percent or more.
However, Biden seems completely disconnected from this reality. In a recent interview with Keynote USA, he responded to these inflation figures by stating, “They have money to spend.” In reality, it now costs the average American family $12,000 more to maintain the same standard of living as it did before President Biden took office.
Biden also attempted to deflect from this consumer pain by claiming he inherited high inflation. Fact check: Inflation was 1.4 percent when he took office.
The situation is especially bad for small businesses. “Customers who used to come every week now come every three weeks,” says Joe Germanotta, a New York restaurateur. This statement reflects what I hear from small businesses across the country. When people are faced with $20 for a hamburger or $10 for dry cleaning, they choose to eat and do laundry at home.
The economic problems of small businesses are exacerbated by the credit crisis and crime. Resurgent inflation has forced the Federal Reserve to keep interest rates at 22-year highs, restricting access to the capital entrepreneurs need to thrive. A third of small businesses say rising crime is reducing their revenue.
The Democrats’ regulatory and fiscal attack will only add more pressure. The Biden administration recently issued rules expanding overtime pay, prohibiting non-compete contracts, requiring the use of electric vehicles, and regulating internet access. The Corporate Transparency Act, which went into effect this year, burdens all small businesses with annoying reporting requirements and the risk of going to jail for non-compliance.
Biden recently promised that, if re-elected, he will dramatically increase taxes on small businesses by allowing the Tax Cuts and Jobs Act to expire in 2025, as scheduled. That means small businesses would face a 20 percent tax increase, an end to bonus depreciation, and higher tax brackets on their profits.
Two-thirds of JCN’s SBIQ national survey respondents among small business owners already say current economic conditions could force them to close. Massive tax increases like these will push many over the edge.
Biden has been in government for half a century and doesn’t know what it’s like to run a company. Most Democrats do the same thing and never sign the front of a paycheck. They treat small businesses as if they were a state of nature, like the Great Lakes or the Rocky Mountains.
In reality, small businesses need the right policy environment to thrive and even survive. What Democrats still can’t do is pass a mandate to prevent small businesses from simply closing their doors in the face of these threats and opting to do something less productive. At least not yet.
Alfredo Ortiz is CEO of Job Creators Network, author of “The Real Race Revolutionaries,” and co-host of the Main Street Matters podcast.
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