Small businesses struggling due to the current economic tumult are officially filing for bankruptcy at worrying levels only last scene at the original onset of the lockdown-caused recession, despite the recent claims from President Joe Biden claiming a strong increase in new business ventures.
Economic events such as inflationary pressures, along with the spiking interest rates sparked by monetary tightening from the Federal Reserve, had created a massive spike in the total number of both small and medium-sized businesses choosing to push through with filing for bankruptcy, as expressed in a note coming from investment bank UBS which was recovered by Business Insider. Increasing worries of a credit crunch just as the world has experienced the cascading failure of multiple banks have forced the rise in bankruptcies. The total number of business closures flew past the peak seen just over three years ago when governments implemented their lockdown mandates.
The total number of monthly bankruptcy filings peaked out at close to 32,000 as reported back in February 20234, a massive 18% spike from the 27,000 bankruptcy filings reported at this time last year, as explained via data made public by the American Bankruptcy Institute. Chapter 11 bankruptcies, normally utilized by much larger groups because of the severely complex nature of the filing, spiked by 83% over the same timeframe.
Reporting out of the White House have chosen to try and hide or downplay the present challenges afflicting the nation economically and the overall burdens they spawn when it comes to small businesses. Biden has reportedly been seen bragging about the overall higher rates of new business formation seen in the past three years, as explained in data sets coming from the Census Bureau, without speaking at all on the phenomena that have afflicted the entrepreneurs at the same time.
“When I came into office, this economy was reeling. Small businesses were hurting. Literally hundreds of thousands of small businesses had closed across the country. Millions of Americans, many of whom worked in small businesses, lost their jobs through no fault of their own,” Biden stated last week. “To jumpstart American economic recovery, we needed to help the small businesses and we needed to help them fast. So we got to work.”
Sleepy Joe made the claim that the American Rescue Plan had boosted the economy by delivering fast-paced emergency loans to multiple millions of businesses. Critics have claimed that the massively bloated stimulus package has spawned increased labor shortages by utilizing enhanced federal unemployment benefits established amid the recession, a reality which thereby increased the nation’s overall price levels.