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Tag: economic recovery
Joe Biden

How Biden’s Rescue Plan Saved Six Million Small Businesses In 2021

Nearly one year ago, President Joe Biden muscled his landmark pandemic stimulus legislation through a Senate with a razor-thin Democratic majority, despite unanimous Republican opposition. The American Rescue Plan Act revitalized the economy and delivered billions of dollars to struggling small businesses, a new report from the nonprofit Invest in America details.

"Today, many small businesses have been able to stay afloat due in part to the aid delivered through the ARP," Awesta Sarkash, government affairs director of the nonprofit Small Business Majority, said in a statement provided to the American Independent Foundation. "These targeted programs bolstered small businesses during difficult times and provided them with the funding they needed to persevere."

The American Rescue Plan, which became law in March 2021 and allocated $1.9 trillion in federal funding for stimulus checks, unemployment payments, child tax credits, local emergency funding, and more, came at a pivotal time for small businesses, advocates said.

In February of last year, three out of 10 small businesses reported they wouldn't be able to survive the next three months without immediate grant assistance, according to a survey from the Small Business Majority.

The American Rescue Plan also came with critical programs for small business owners like the Paycheck Protection Program, the Restaurant Revitalization Fund, and the Shuttered Venue Operators Grant.

The law allocated an additional $280 billion to the PPP loan program, which sent federally guaranteed, no-fee, forgivable loans to keep small businesses afloat by paying expenses like employee benefits, payroll, mortgage or rent payments, utilities, and COVID-19 safety equipment.

While the program was first created to support small businesses under President Donald Trump as part of the 2020 COVID relief law, the CARES Act, a Washington Post analysis of Small Business Administration data later showed that more than half of the money went to big businesses. Last year, however, 96% of PPP loans went to businesses with 20 or less employees, the Invest in America report shows.

Additionally, the Shuttered Venue Operators Grant sent out $13.4 billion to about 13,000 theaters and other venues last year to make up for their lost income due to closures during the pandemic.

And the Restaurant Revitalization Fund disbursed $28.6 billion to restaurants with the same goal in mind in 2021. By supporting more than 100,000 restaurants, the fund saved 900,000 workers their jobs, the National Restaurant Association estimated.

Of the restaurant grant recipients, 96% said it likely allowed them to stay in business during the pandemic, and 86% said it permitted them to keep or hire back employees who'd otherwise have been out of a job.

"[In the beginning of 2021], we were seeing a lot of small business owners lay off employees, and most small business owners will tell you that their employees are like family, so it was that much more dire," Sarkash told the American Independent Foundation.

When the pandemic first hit in March of 2020, businesses took a huge blow to their revenues, with lockdowns keeping shoppers at home. But the toll was especially pronounced for small businesses, who were not as prepared to shift their services online or find ways to continue serving customers.

"You could own an independently owned bookstore or hardware store or toy store and you had to close, but somebody could go to Walmart to buy groceries and while there, they could buy books, they could buy clothes, they could buy hardware," Kennedy Smith, a researcher with the advocacy organization Institute for Local Self-Reliance, told the American Independent Foundation.

Experts argue that keeping small businesses up and running is vital for the national economy. The Invest in America report links the ample funding provided to small businesses with a historic economic recovery, which some economists estimate happened at a rate eight times faster than after the Great Recession that ended in 2009. In 2021, the economy added 6.6 million jobs and 5.4 million new private businesses.

"During the shutdown, when people were not able to access their local businesses, I think that made them aware that their local businesses in their community had a huge role to play in keeping our economy afloat," Derek Peebles, executive director of the American Independent Business Council, said in a phone call.

Now, as they mark the first anniversary of the American Rescue Plan's passage, small business advocates want to see more action from Biden to support small businesses.

A few recommendations from Smith include comprehensive training programs for new business owners; affordable operating space; child care services for owners and employees; and minority-owned business development programs to close the racial entrepreneurship gap.

"[The American Rescue Plan] at least helps make small businesses whole from the damage they suffered during the pandemic, but it doesn't do a lot to change the overall environment for small business development," Smith said.

Smith and other small business advocates want continued investments in recognition of small businesses' central role in American civic life.

As Chanda Causer, co-executive director of the organization Main Street Alliance, told the American Independent Foundation: "This investment in sustaining those businesses, it's an investment in the next generation. It's an investment in education and civic life, our public systems, our firefighters — without those things our ecosystem starts to fall apart."

Reprinted with permission from American Independent

Biden Economy Surpasses Goals Set By Trump

Biden Economy Surpasses Goals Set By Trump

Not since The Karate Kid was playing in movie theaters and Wendy's introduced its "Where’s The Beef?" ad campaign, has the U.S. economy seen such rapid growth.

America's real gross domestic product, a snapshot of a country’s economic output, increased by 6.9% in the last quarter of 2021, according to newly released figures from the U.S. Department of Commerce.

The average GDP was 5.7% during President Joe Biden's first year in office — the fastest economic growth the country has seen since 1984.

"The GDP numbers for my first year show that we are finally building an American economy for the 21st Century, with the fastest economic growth in nearly four decades, along with the greatest year of job growth in American history," Biden said in a statement on Thursday. "And, for the first time in 20 years, our economy grew faster than China's."

This week's report confirmed that the country is seeing faster job growth under Biden than under the last three Republican presidents combined, according to Simon Rosenberg, founder of the liberal think tank NDN.

When he was in office, President Donald Trump often boasted about stimulating "the greatest economy in the HISTORY of America." In reality, Trump oversaw the worst drop in real GDP in American history, largely because of his administration's botched response to the COVID-19 pandemic.

Trump once bragged about 3% growth, calling it "one of the great gifts to the middle-income people that they've ever gotten for Christmas."

"The economy now is at 3%," he told reporters in 2017. "Nobody thought it would be anywhere close. I think it could go to 4, 5, and maybe even 6%, ultimately."

Trump's prediction did ultimately come true — under a Biden presidency.

President Barack Obama also surpassed Trump's quarterly growth rates, reaching a quarterly rate of 5.2 percent in the middle of 2014.

The U.S. added more than six million jobs during Biden's first year in office. Trump, by contrast, presided over the loss of nearly 10 million jobs amid the COVID-19 pandemic.

Of the 42 million jobs created since 1989, almost all of them — a staggering 95 percent — have been added during Democratic presidencies, Rosenberg added.

Whether it's real GDP, employment, stock prices, or income, nearly every economic indicator reveals what Trump himself admitted to CNN's Wolf Blitzer in 2004: "The economy does better under the Democrats."

Behind 2021's robust economic recovery is Biden's $1.9 trillion American Rescue Plan, which sent $1,400 relief checks to most Americans, expanded unemployment benefits, and invested in state and local governments, small businesses, and health care.

A December report from the Roosevelt Institute found that the American Rescue Plan spurred massive job growth while protecting the economy from the pandemic's worst effects.

Democrats in Congress passed the measure last March, over the opposition of every Republican in Congress. Since then, some of the same Republican lawmakers who voted against the American Rescue Plan have taken credit for the public projects it funded.

"It's amazing how Democrats are creating economic growth and didn't have to hand out trillions in tax cuts to big corporations and the wealthy!" Rep. Gwen Moore (D-WI) tweeted on Thursday. "Instead, we supported funding to open schools, get Americans vaccinated, and people back to work. Trickle-down economics is a myth."

Reprinted with permission from American Independent

Paul Krugman Explains How France Has 'Done Better' Ecnomically During Covid

Paul Krugman Explains How France Has 'Done Better' Ecnomically During Covid

Although former President Donald Trump and his MAGA ally Steve Bannon have been enthusiastic supporters of Marine Le Pen — the far-right National Rally leader and White nationalist who lost to President Emmanuel Macron in France’s 2017 presidential election — many on America’s right have been quick to bash France over the years, including the country’s economic policies. But liberal economist and New York Times opinion writer Paul Krugman, in his January 14 column, argues that France’s economic policies during the COVID-19 pandemic have been a succ

ess.

“For as long as I can remember,” Krugman writes. “U.S. media coverage of the French economy has been relentlessly negative…. The data never actually supported this negativism. What was really going on, I believe, was that business and economic discourse in the United States is strongly shaped by conservative ideology — and given that ideology, France, with its huge social expenditure, high taxes and extensive economic regulation, should have been a basket case. So, reporting about France seized on every negative development as a sign that the long-awaited disaster was finally arriving.”

Krugman adds, however, that the French government’s economic policies have worked well during the pandemic. France, he notes, has “not only managed to avoid a huge plunge in employment, but has also surpassed its pre-pandemic level.”

“My sense is that many Americans still imagine that France suffers from mass unemployment — a vision that had some truth to it 25 years ago but has long been out of date,” Krugman writes. “And prime-age employment is where France has done astonishingly well during the pandemic…. How did it do that?”

Krugman continues, “When the pandemic forced economies into a temporary lockdown, Europe, France included, and the United States took divergent routes toward supporting workers’ incomes. We offered enhanced unemployment benefits; France offered subsidies to employers to keep furloughed workers on the payroll. At this point, it seems clear that the European solution was better, because it kept workers connected to their employers and made it easier to bring them back once vaccines were available.”

The economist notes that although France has “its anti-vaxxers,” the country has a higher COVID-19 vaccination rate than the United States. Nonetheless, Krugman points out that American liberals and progressives shouldn’t think that France is idyllic.

“I don’t want to romanticize the French economy or French society, both of which have plenty of problems,” Krugman observes. “And liberals who like to imagine that we could neutralize the anger of the White working class by raising wages and strengthening the social safety net should know that France — whose policies are to the left of U.S. progressives’ wildest dreams — has its own ugly White nationalist movement, albeit not as powerful as ours.”

The economist adds, “Still, at a time when Republicans denounce as destructive ‘socialism’ any effort to make America less unequal, it’s worth knowing that the economy of France — which isn’t socialist but comes far closer to socialism than anything Democrats might propose — is doing pretty well.”

Republished with permission from Alternet

Economy Near Full Employment With Seven Million Jobs Added Under Biden

Economy Near Full Employment With Seven Million Jobs Added Under Biden

On Friday, the Bureau of Labor Statistics released its monthly jobs report for December 2021, which showed the U.S. economy regained 18.8 million jobs of the 20 million jobs that were lost at the height of the COVID-19 pandemic in April 2020.

More than 7 million of the jobs that have been regained since the start of the pandemic were added in the last year alone, according to the bureau's report. The U.S. economy has been steadily adding jobs over the past year as the country continues to dig out from the devastating toll taken by the COVID-19 pandemic.

The bureau found that the country added 199,000 jobs in December, which was below estimates, while revising its previous jobs report numbers to add 39,000 jobs to its November 2021 report and 102,000 jobs to its October 2021 report.

The report, which was recorded before U.S. case numbers surged due to the virus's highly contagious Omicron variant, also showed a decrease in the unemployment rate from 4.2 percent to 3.9 percent between November 2021 and December 2021. Unemployment, which stood at 6.3 percent when Biden took office, declined more in 2021 than in any previously recorded year.

The latest jobs report comes after the U.S. Department of Labor revealed on Tuesday that 4.5 million Americans quit their jobs in November, setting a new record. The passage of legislation like the American Rescue Plan, which was signed into law in March by President Biden with only Democratic votes in the House and Senate, provided benefits to millions of workers and families affected by the pandemic.

Experts have said that financial support has allowed workers to negotiate for better pay and working conditions as the economy has improved. Much of the turnover has been concentrated in low-paying jobs, as the tight labor market has given workers more leverage to seek better job opportunities.

"This Great Resignation story is really more about lower-wage workers finding new opportunities in a reopening labor market and seizing them," Nick Bunker, director of economic research at the Indeed Hiring Lab, told The New York Times.

Reprinted with permission from American Independent