Entrepreneurs are facing serious difficulties due to wide-ranging government policies | Opinion

The specter of stagflation has returned. April 25volThe Bureau of Economic Analysis announced that GDP grew by only 1.6% in the first quarter of this year, well below expectations.

Consumer spending on goods actually declined this quarter as ordinary Americans are financially exhausted. The report also found that inflation remains persistently high, continuing a recent trend of resurgent inflation that is about twice the Federal Reserve’s target rate.

America’s small businesses are the biggest victims of a stagflationary economy weighed down by big government policies. This was the biggest story to emerge this month during National Small Business Week.

President Biden says small businesses have “thrived” under his administration. The reality is that entrepreneurs face a triple threat: a slowing economy, skyrocketing inflation, and rising credit expenses resulting from poor company policies.

American consumers have a record $1.2 trillion in credit card debt. They experience a decline in real wages and are struggling with a cost of living crisis. They cannot afford to sustain the discretionary spending that small businesses rely on to survive and thrive.

Today, the average American family can enjoy the same standard of living as it did before President Biden took office with $12,000 more.

Since Biden’s inauguration, wholesale costs for small businesses have increased by 20%. To maintain slim profit margins, entrepreneurs are forced to raise prices, alienating loyal customers and reducing demand. Commentators and the media fail to understand that only a specific group of customers are willing to pay for non-essential goods and services.

To deal with outrageous inflation, the Fed raised interest rates to the highest level in 22 years. High credit costs make access to capital difficult, making it impossible or even impossible for small businesses to develop or even continue their operations.

The Fed was expected to begin cutting interest rates soon, but as I predicted, with inflation resurging, it has no choice but to maintain today’s elevated levels while continuing the credit crunch.

Given these difficulties, it’s no surprise that a national survey of small businesses conducted by the Job Creators Network found that two-thirds of respondents say the current economic climate could force them to close. Most businesses say the price increases they face are greater than official inflation figures suggest. One-third say increased neighborhood crime reduces their earnings. Small businesses are squealing, not thriving.

The coverage of National Small Business Week was no surprise – the mainstream media refuses to admit that government policies are causing small businesses to suffer. Consider the reckless spending that is fanning the flames of inflation. The annual deficit is expected to exceed $2 trillion this year, and every three months the nation adds another $1 trillion to the national debt. Money printing quickly devalues ​​the value of the dollar, harming small businesses and consumers.

The Biden administration is also facing a regulatory onslaught that is hitting small businesses hard. It recently passed legislation expanding overtime pay, banning non-compete agreements, mandating the use of electric vehicles and regulating internet access. According to the American Action Forum, the Biden administration has issued more than $1 trillion in regulations – 30 times more than under President Trump.

Biden’s biggest threat to small businesses is yet to come. He recently he promissed that if re-elected, he would dramatically raise taxes on small businesses, allowing the Tax Cuts and Jobs Act to expire in 2025 as planned. This means small businesses will face a 20% tax increase, an end to bonus depreciation and higher tax brackets on their earnings. This massive tax increase would throw today’s stagflationary economy into recession.

This is the real message of National Small Business Week: Biden and Democrats are in a war on small businesses that won’t end until they are voted out of office.

Alfredo Ortiz is CEO of Job Creators Network, author of The Real Race Revolutionaries, and co-host of the Main Street Matters podcast.