Relentless Inflation “putting a massive burden” on Small Businesses: SBE Council Responds to Latest Data

By SBE Council at 12 January, 2022, 11:41 am

NEWS

For Immediate Release

Washington, D.C. - Today, the Bureau of Labor Statistics (BLS) reported that inflation spiked 7% in December 2021, the fastest growth since 1982. Small Business & Entrepreneurship Council (SBE Council) president & CEO Karen Kerrigan and chief economist Raymond Keating issued the following statement in response to the latest BLS data, and the path forward for sound policy.

Kerrigan observed:

"Relentless inflation is putting a massive burden on small businesses and consumers alike. Unfortunately, President Biden and the congressional majority in Congress continue to focus on an agenda that is fueling inflation's flame and intensifying its effects. Policies and proposed policies are creating extraordinary uncertainty for businesses. Regulatory efforts underway will make it more restrictive and costly for businesses to operate, hire, retain workers, access markets, invest, innovate and do all the normal and necessary things that will help our economy heal and more effectively navigate COVID and its variants. Unfortunately, what business owners and entrepreneurs see coming out of the White House is tone-deaf policymaking and chaotic action with regard to the pandemic. A big policy reset is in order, and the White House and congressional leaders need to include entrepreneurs and small business owners in that effort."

Keating added:

"At 7% in 2021, the U.S. experienced its highest level of inflation since 1982. That's deeply troubling. Inflation is undermining the economic recovery in a variety of ways. It is creating uncertainty for entrepreneurs, businesses and investors. It is raising costs for businesses, a burden small businesses cannot endure at this critical time. It diminishes the purchasing power of the dollar and raises taxes. For example, the real capital gains tax is higher than the stated nominal rate since gains are not indexed for inflation."

Keating continued:

"While various factors have been fueling inflation over the past year, the policy responses should be clear. Namely, the Federal Reserve needs to get monetary policy focused on price stability, and that means reining in the loose money the Fed has been running for far too long. As for Congress and the administration, policies must reduce tax and regulatory burdens on entrepreneurship, investment, business and work are vital to boosting incentives for these vital undertakings that drive innovation, productivity, and economic growth. In other words, policy needs to moving in the exact opposite direction of its current path."

Contact:

Karen Kerrigan, [e-mail]

Raymond Keating, [e-mail]

SBE Council is nonpartisan advocacy, research and education organization dedicated to protecting small business and promoting entrepreneurship. For 27 years, SBE Council has worked on and advanced a range of private sector and public policy initiatives to strengthen the ecosystem for strong startup activity and small business growth. Visit www.sbecouncil.org for additional information. Twitter: @SBECouncil

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