On January 19th, 2022, Joe Biden marked the end of his first year as President with a press conference in which he painted a flowery picture of the state of our nation. Included in his rosy report were millions of new jobs, low unemployment, a 30% increase in new business applications, and a “raise” in income for working people. It’s a shame that all this good news is predicated on lies.
To begin to understand the truth about our economic situation, we must understand inflation. The annual US inflation rate hit 7% in December 2021 — the highest it has been since 1982. In simplest terms, inflation occurs when the prices of goods and services trend higher and higher, therefore each dollar in your pocket is worth less and less. One of the industries contributing most to the inflation rate is Energy, which is currently seeing an over 30% price increase. Gas prices are 58% higher than a year ago, and every time you go to the grocery store you are paying approximately 6% more than this time last year.
Inflation is not a simple problem that is caused by one wrong step — it is the result of months, years, and sometimes decades of poor economic decisions and policy. The current supply chain crisis and the labor shortage we are experiencing in the United States are certainly part of the reason we are seeing such an alarming rate of inflation. Another contributor no doubt is the obscene spending habits of our government under every President in recent memory. By the end of Donald Trump’s single term, the national debt reached $26.9 trillion, up from the $19 trillion left by Barack Obama. Now with President Biden terrifyingly at the helm we are sitting on more than $28 trillion in debt with expectations that we could reach $30 trillion before the end of 2022. Debt is added when the government spends more than they bring in through taxes and other incomes. This money has to come from somewhere though — as the government insists on continually dumping more into their ineffective social programs and the military industrial complex. So where do they get the money? As of now more than $6.5 trillion is “intragovernmental debt.” This is money that has been taken from other things the government is “funding,” like social security, and left behind is little better than billions of IOUs the government has written itself. The bulk of the rest of the debt is considered publicly held, which means debt to individuals, corporations, foreign, state and local governments, and of course, the Federal Reserve, unaffectionately known as “The Fed.” The Federal Reserve is the central bank that controls the amount of US currency in circulation. When involved in the national debt, the Fed prints new money and uses it to buy some of those IOUs. If creating new money from nothing to buy promises from the US Government that they will get you back one day sounds like madness to you, you’re starting to see what’s going on here (and you would do well to read End The Fed by former Congressman Ron Paul).
Lawmakers across the spectrum appreciate that most people don’t comprehend the impact of such crippling debt, because they won’t be held accountable for the fiscal folly they continue to support and promote. However, our government’s debt hurts us both now and in the future, through inflation and inevitably higher taxes. It is another way that our government exercises control over us; over what we can afford and how far our dollars go. President Biden’s claim that “for the first time in a long time, this country’s working people actually got a raise” is simply untrue. Wages are technically up from this time last year, however when we take into account the value lost to inflation, real wages are down 2.2.%.
The President’s mention of increased new business applications carries additional insult to those who are aware of a change that took place on the first day of this year. Included in the $2 trillion American Rescue Plan Act of 2021 — the bill that was sold to the American people for its stimulus checks to families and plans to help small businesses — was a provision that makes it easier for the IRS to peep into your bank accounts. Until now, a small business owner only had to report to the IRS if they received payments of $20,000 or more and at least 200 transactions in a year. The American Rescue Plan Act lowered that threshold to only $600 in aggregate payments, and no minimum transaction number. While attempting to garner support for this measure, President Biden had the audacity to claim:
“It’s a way to catch people moving money around from unreported sources… [and] uncover tax dodging by the wealthy.”
It’s difficult to even respond in the face of such transparent… uh, malarkey.
It is not “the wealthy” making business transactions of hundreds of dollars. Quite the opposite, in fact. This new rule applies to services such as Venmo, Paypal, Etsy, Uber, and Airbnb. The vast majority of people using these platforms are doing so to supplement their income — in many cases to help their families make ends meet. Biden touts a 30% increase in new business applications (a record 5.4 million adults applied to form their own business in 2021), but fails to mention the part about monitoring and taxing these businesses like never before.
One of Biden’s most repeated campaign promises was no raised taxes on Americans making $400,000 or less. Inflation is a silent tax on the middle and lower class. The change in IRS reporting is absolutely a tax hike on small businesses.
“Maybe it’s a boon to the IRS, but it’s not coming from the billionaires — it’s coming from the smaller businesses,” said Sandra O’Neill, a tax attorney and partner at Bowditch & Dewey. “It’s much harder to go after the billionaires. It’s much harder to go after Amazon. If you have someone who makes a mistake — a small business — it’s very easy to go after them.”
The policies of the current administration are indefensible, but they’re not even close to surprising. This is what Americans are coming to understand more and more every day. While we are finally coming back from the economic devastation from COVID-19 closures, small business owners are being attacked (again) just when they should be supported the most. Why? Because it’s not really about politics, it’s not about if you are a Republican or a Democrat, it’s about being a member of the elite, ruling class, or being an average American. They will continue to tell you what they know you need to hear to give away your vote, but as long as that vote goes to yet another status quo oligarch, you can expect this same kind of deception that will never hurt them, but will keep the rest of us under their boot.
“It’s a big club, and you ain’t in it. You and I are not in the big club. And by the way, it’s the same big club they use to beat you over the head with all day long when they tell you what to believe. All day long beating you over the head in their media telling you what to believe, what to think and what to buy. The table is tilted folks. The game is rigged, and nobody seems to notice, nobody seems to care.”