On Wednesday, the country reached a tragic milestone: under President Biden, inflation reached 20%. Under his watch, the dollar’s value has plummeted. The Bureau of Labor Statistics also reported that the consumer price index is rising, outpacing average wages. This data, together with sluggish GDP growth, indicates that the US economy is returning to stagflation.
Historic inflation is resulting in lower living standards and a cost-of-living catastrophe. Grocery prices have grown by roughly one-third during Biden’s administration, while gasoline prices have soared by 50%. It appears that every daily convenience, from a turkey sandwich to some handyman work, has skyrocketed by 50 percent or more.
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However, Biden appears to be completely out of touch with reality. In a recent CNN interview, he responded to the inflation figures by stating, “They have the money to spend.” In truth, the average American family today pays $12,000 more to maintain the same living conditions as before President Biden took office.
Biden also attempted to deflect consumer discomfort by stating that he inherited high inflation. Fact check: When he started office, inflation was at 1.4 percent.
The situation is particularly difficult for small enterprises. “Customers that used to come in every week now come in every three weeks,” says Joe Germanotta, a New York restauranteur. This message mirrors what I’ve heard from small companies across the country. When given the choice between $20 for a burger and $10 for dry cleaning, most people prefer to dine and do their laundry at home.
A loan crunch and crime exacerbate small businesses’ economic troubles. Resurgent inflation has caused the Federal Reserve to maintain interest rates at 22-year highs, limiting access to money that businesses require to succeed. One-third of small firms report that increased crime is lowering their earnings.
The Democrats’ regulatory and tax onslaught will just add to the pressure. The Biden administration recently issued regulations increasing overtime pay, prohibiting noncompete contracts, mandating electric vehicle use, and regulating internet access. The Corporate Transparency Act, which went into effect this year, burdens every small business with inconvenient reporting obligations and the possibility of jail time for disobedience.
Biden has vowed that if reelected, he will significantly increase taxes on small businesses by allowing the Tax Cuts and Jobs Act to expire in 2025 as planned. That implies small enterprises would face a 20% tax increase, the elimination of bonus depreciation, and higher tax bands on earnings.
According to JCN’s SBIQ nationwide poll of small business owners, two-thirds believe the present economic conditions will force them to close. These massive tax increases will push many people to the brink.
Biden has spent half a century in government and has no idea what it’s like to operate a business. Most Democrats are the same way: they never sign the front of their paycheck. They regard tiny firms as if they were a natural phenomenon, such as the Great Lakes or Rocky Mountains.
In reality, small firms require the correct policy climate to thrive—and even survive. Democrats are still unable to enact legislation to prevent small businesses from just closing their doors in the face of these threats and deciding to do something less useful. At least, not yet.
