The Economist, a British journal founded in 1837 to promote free markets and free trade, has called the Biden-Harris economy “the envy of the world.” It has “grown by 10% since 2020, three times the pace of seven industrialized nations” (Oct. 19, 2024). One week later, the editors celebrated the American economy as “glorious.”
In November 2017, this same journal asserted that “Trump’s apparent economic success to date mostly reflects fortunate timing.” The Obama-Biden administration gave Trump an economic growth rate of 2.3%, but Trump’s rate was the same just before the pandemic (Investopedia, Nov. 4, 2024). Biden-Harris’ economic growth is now 2.7%.
In a campaign appearance for Harris on Oct. 11, Obama reminded the audience that Trump’s economy was “pretty good, because it was my economy. I handed over 75 straight months of job growth to him.” Biden-Harris have added a record 16 million jobs in just four years.
By the end of Trump’s first term, the nation was much deeper in debt. Obama-Biden left Trump with an annual budget deficit of 3.2% that he increased, primarily because of huge tax cuts, to 14.7%. The result in 2020 was $7.8 trillion more debt for the nation. The current Biden-Harris deficit has now dropped to 6.6%.
Yale economists Jeffrey Sonnenfeld and Stephen Henriques assert that “Trump oversaw the largest spending deficit in any year since World War II. Full-term net spending increases under Trump were also greater than Biden-Harris, with or without pandemic relief.”
Now, The Economist declares that President-elect Trump “poses the biggest risk to America’s extraordinary economy.” The editors noted that Trump has promised so many tax cuts that the national debt might rise from its current level of 100% of Gross Domestic Product (equalizing debt and spending) to 160% by 2035. That would put us on par with Eritrea, one of Trump’s African “s---hole” countries.
After tax income is outpacing inflation (2.6% in recent months) and it is now an average of $52,000 across the nation. We have never been very good savers, but the savings rate has now doubled to 5%.
The “misery rate” — the combination of the unemployment and inflation rates — is the lowest since early 2020. One would have to go back to the late 1960s to match longer sustained unemployment rates under 4%. The Economist notes that “the workforce-participation rate for people between 25 and 54 is nearly 84%, just shy of the record high.”
Trump used to boast that Black unemployment was the lowest ever during his first administration, but it had been dropping already under Obama-Biden. It has now reached a record low of 4.7% under Biden-Harris.
Black teen unemployment has also gone down to the lowest ever. This puts the lie to the Wall Street Journal’s claim that the Biden-Harris economy is “glorious” only for the nation’s liberal elite.
Even though inflation has gone down from 9% to 3%, Kamala Harris most likely lost the election because of high prices. For example, the price of eggs in the U.S. skyrocketed, not because of Biden-Harris (absurd of course), but because avian flu wiped out 30 million chickens.
High inflation bedeviled most nations coming out of the pandemic, and the British Conservative government experienced 11% inflation. Most of that was because of COVID-19 and supply chain disruptions across the world. Completely independent from Biden-Harris, the Federal Reserve increased interest rates 17 times over two years.
Charges of price gouging was correct in some industries. The two Yale economists quoted above report: “The three largest baked-goods companies hold a market share of more than 50%, and some of them saw their net income increase by 75%. Some major fuel refiners saw net income increase by more than 1,000%. Furthermore, pharmacy benefit managers continue to see rapid profit growth at the expense of patients.”
Economists estimate that only 2% of high inflation was because of deficit spending, but it was precisely this decision that saved the economy. European countries decided not to go into debt, but they have had a very slow pandemic recovery because of it.
Trump threw away the Obama-Biden economic gift of 2017, and it looks as if he will, once again, go ahead with large tax cuts. He will also start trade wars with even friends such as Canada and Mexico. I predict that he will certainly destroy the “glorious economy” that has been given to him, but he will, for sure, take full credit for its benefits.
Gier is professor emeritus at the University of Idaho. For more on Biden-Harris’ achievements see bit.ly/3L0sZ3K. Email Gier at ngier006@gmail.com.
