As COVID-19 continued to spread, the death toll increased, causing widespread panic in financial markets. In a historic move, oil prices briefly reached negative values, reflecting the uncertainty and turmoil caused by the pandemic. To mitigate the effects of the sudden recession, the Federal Reserve took decisive action by slashing its benchmark interest rates. Additionally, the U.S. government embarked on an unprecedented borrowing spree, accumulating trillions of dollars in national debt, in order to provide essential support to families and businesses during these challenging times.
According to an April poll conducted by The Associated Press-NORC Center for Public Affairs, Trump appears to have an advantage over President Joe Biden when it comes to important economic issues. The survey revealed that a majority of Americans believed that Trump, during his presidency, contributed positively to job creation and the cost of living. In contrast, nearly 60% of Americans expressed the view that Biden’s presidency has had a negative impact on the cost of living.
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- 1 DECENT (NOT EXCEPTIONAL) GROWTH
- 2 MORE GOVERNMENT DEBT
- 3 LOW INFLATION (BUT NOT ALWAYS FOR GOOD REASONS)
- 4 FEWER JOBS
DECENT (NOT EXCEPTIONAL) GROWTH
In 2017, Trump told the public that his tax cuts would boost the US economy by “3%,” but he added, “I think it could go to 4, 5, and maybe even 6%, ultimately.”
The Bureau of Economic Analysis reports that under Trump, growth after inflation averaged 2.67% if we remove the 2020 pandemic. With the pandemic-induced recession, the average falls to an anemic 1.45%.
In contrast, growth during then-President Barack Obama’s second term averaged 2.33%. So far, under Biden, annual growth has averaged 3.4%.
MORE GOVERNMENT DEBT
The Office of Management and Budget reveals that the deficit in 2018 reached $779 billion, which was higher than the Congressional Budget Office’s initial projection of $563 billion before the implementation of tax cuts. As a result, the tax cuts contributed to an increase in borrowing by $216 billion during that year. The deficit further escalated in 2019, reaching $984 billion, which exceeded the CBO’s forecast by nearly $300 billion.
Under Biden, there have been significant deficits due to the implementation of various initiatives. These include the signing of a third round of pandemic aid, efforts to combat climate change, investments in infrastructure, and support for U.S. manufacturing. The budget deficits for the years 2021, 2022, and 2023 are estimated to be $2.8 trillion, $1.38 trillion, and $1.7 trillion respectively.
According to a report released on Wednesday by the CBO, extending certain portions of Trump’s tax cuts beyond 2025 would result in an additional $4.6 trillion being added to the national debt by 2034.
LOW INFLATION (BUT NOT ALWAYS FOR GOOD REASONS)
Inflation remained significantly lower during Trump’s presidency, with an annual rate never exceeding 2.4%, as reported by the Bureau of Labor Statistics. However, under Biden’s administration, the annual rate soared to as high as 8% in 2022 and currently stands at 3.4%.
During Obama’s second term, the inflation rate only managed to average slightly over 1%. This was a challenging time for the Federal Reserve as they grappled with stimulating economic growth. Despite this, the economy continued to expand steadily without experiencing any overheating issues.
During the initial three years of Trump’s presidency, inflation averaged around 2.1%, aligning closely with the Federal Reserve’s target. Despite this, the Fed chose to increase its benchmark rate to maintain low inflation levels, aiming for a 2% target. Trump consistently voiced his disapproval of the Fed’s actions, as he desired to stimulate economic growth, despite the potential risks of escalating prices.
The pandemic struck, causing widespread disruption.
During the lockdowns, the economy faced a decline in inflation, leading the Federal Reserve to take action by cutting interest rates.
Trump is celebrating historically low mortgage rates, which can be attributed to the weakened economy caused by the pandemic. In a similar vein, gasoline prices plummeted to an average of $2 per gallon in April 2020 due to the lack of driving as the pandemic spread.
FEWER JOBS
According to the Bureau of Labor Statistics, the United States saw a loss of 2.7 million jobs during President Trump’s tenure. However, if we exclude the months impacted by the pandemic, he was able to add 6.7 million jobs.
During Biden’s presidency, 15.4 million jobs were added, exceeding the CBO’s initial forecast by 5.1 million. This impressive increase in employment is a clear indication of the significant impact Biden’s policies, including his coronavirus relief measures, had on the labor market.
Both candidates have made repeated promises to revive factory jobs. From 2017 to mid-2019, Trump managed to create 461,000 manufacturing jobs. However, these gains gradually slowed down and eventually resulted in job cuts during the pandemic, leading to a loss of 178,000 jobs for the Republican candidate.
During Biden’s presidency, the U.S. economy has successfully added 773,000 manufacturing jobs.
