On Wednesday, the country hit a sad milestone: Inflation under President Biden hit a cumulative 20 percent. The dollar’s value has plummeted under his watch. 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, this data shows the U.S. economy is reentering stagflation.
Historic inflation is causing declining living standards and a cost-of-living crisis. Under Biden’s presidency, grocery prices have increased by nearly one-third and gas has risen by 50 percent. It feels like every daily convenience — from a turkey sandwich to some handyman help — has increased by 50 percent or more.
Yet Biden seems entirely out of touch with this reality. In a recent CNN interview, he responded to these inflation numbers by claiming, “They have the money to spend.” In reality, it now costs the average American family $12,000 more to maintain the same living standards as before Biden took office.
Biden also tried 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 that used to come in every week now come in every three weeks,” says Joe Germanotta, a New York restauranteur. This statement reflects what I’m hearing from small businesses nationwide. When people are faced with $20 for a burger or $10 for dry cleaning, they choose to eat and do laundry at home instead.
Small business economic woes are compounded by a credit crunch and crime. Resurgent inflation has forced the Federal Reserve to hold interest rates at 22-year highs, restricting access to capital entrepreneurs need to thrive. One-third of small businesses say increased crime is reducing their earnings.
Democrats’ regulatory and tax onslaught will only add more pressure. The Biden administration recently issued rules expanding overtime pay, banning noncompete contracts, mandating electric vehicle use and regulating internet access. The Corporate Transparency Act, which took effect this year, burdens every small business with annoying reporting requirements and the risk of jail time for noncompliance.
Biden recently promised that if he’s reelected, he will dramatically raise taxes on small businesses by letting the Tax Cuts and Jobs Act expire in 2025 as scheduled. That means small businesses would face a 20 percent tax hike, the end of bonus depreciation, and higher tax brackets on their earnings.
Two-thirds of respondents to JCN’s SBIQ nationwide poll of small business owners already say current economic conditions could force them to close. Massive tax hikes like these will push many past the brink.
Biden has spent a half-century in government and doesn’t know what it’s like to run a business. Most Democrats are the same, never signing the front of a paycheck. They treat small businesses as if they were a state of nature, like the Great Lakes or 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 stop small businesses from simply closing their doors in the face of these threats and choosing 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.