On Wednesday, the country reached a sad milestone under President Biden, with inflation reaching 20%. Under his watch, the value of the dollar plummeted. The Bureau of Labor Statistics also confirmed that the consumer price index has recovered and is growing faster than average wages. Combined with sluggish GDP growth, this data suggests the US economy is once again entering stagflation.
Historic inflation is causing a decline in living standards and a cost of living crisis. Under President Biden's administration, food prices have increased by nearly a third, and gas prices have increased by 50%. I feel like every everyday convenience, from turkey sandwiches to helping the handyman, has increased by more than 50% for him.
However, Mr. Biden does not seem to understand this reality at all. In his recent CNN interview, he argued against these inflation numbers that “they have money to spend.” In fact, it now costs the average American household $12,000 more to maintain the same standard of living it had before President Biden took office.
Biden also tried to deflect attention from this consumer pain by claiming he inherited high inflation. Fact check: When he took office, the inflation rate was 1.4%.
The situation is particularly bad for small and medium-sized businesses. “Customers who used to come every week are now coming every three weeks,” said Joe Germanotta, a New York restaurateur. This statement reflects what I hear from small businesses across the country. If people have to pay $20 for a hamburger or $10 for dry cleaning, they will choose to eat at home or do their laundry instead.
The economic woes of small businesses are further exacerbated by the credit crunch and crime. A resurgence in inflation has forced the Federal Reserve to keep interest rates at 22-year highs, limiting entrepreneurs' access to the capital they need to grow. One-third of small businesses say their revenues are decreasing due to increased crime.
Democrats' onslaught of regulations and taxes will only add further pressure. The Biden administration recently issued rules that expand overtime pay, ban non-compete agreements, require the use of electric vehicles and regulate internet access. The Corporate Transparency Act, which came into force this year, burdens all small and medium-sized businesses with onerous reporting requirements and the risk of jail time for non-compliance.
Biden recently promised that if re-elected, he would let the Tax Cuts and Jobs Act expire as scheduled in 2025 and significantly increase taxes on small businesses. That means small businesses will face a 20% tax increase, an end to bonus depreciation and higher tax rates on their profits.
In the SBIQ national opinion poll of small and medium-sized business owners conducted by JCN, two-thirds of respondents already said that the current economic situation may force them to close their businesses. Such a large tax increase would push many people to the brink.
Biden has spent half a century in government, but he doesn't know what it's like to run a business. He's like most Democrats, he never signs a paycheck. They treat small businesses as if they were a natural state like the Great Lakes or the Rocky Mountains.
In reality, small and medium-sized enterprises (SMEs) need the right policy environment to grow and even survive. What Democrats still cannot do is pass mandates that would prevent small businesses from simply closing their doors and choosing to be less productive in the face of these threats. At least not yet.
Alfredo Ortiz is CEO of Job Creators Network, author of The Real Race Revolutionaries, and co-host of the podcast Main Street Matters.
Copyright 2024 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
