The Biden administration has been actively promoting “Bidenomics,” asserting its success in growing the economy “from the bottom up and middle out.” However, these claims have faced scrutiny, particularly when contrasted with the economic landscape under the Trump administration. Let’s cut through the talking points and examine the facts comparing the Biden and Trump economies.
Job Creation: Recovery vs. New Growth
BIDEN CLAIM: President Biden and Congressional Democrats highlight the creation of “more than 13 million jobs,” boasting of a historically low unemployment rate.
FACT CHECK: While job numbers have indeed increased, a significant portion represents a recovery from pandemic-related job losses. Nearly 72% of job gains since 2021 are simply recovered jobs, not newly created positions. Comparing today’s employment to pre-pandemic levels shows an increase of only 3.7 million jobs, far less than the claimed 13 million.
Conversely, during President Trump’s first 2.5 years, the economy saw the creation of 5 million jobs – 1.3 million more than under the current administration in a comparable timeframe, even after accounting for pandemic recovery.
Labor Force Participation: Who’s on the Sidelines?
BIDEN CLAIM: The White House emphasizes increased labor force participation, stating a higher share of working-age Americans are in the workforce now than under the previous administration.
FACT CHECK: Despite claims of improvement, the labor force participation rate remains lower under President Biden than it was during the Trump administration. It is currently 0.7 percentage points below the level when President Trump was in office.
Adjusting for population growth, nearly 2 million more Americans are outside the labor force today compared to the previous administration. This suggests that while some have returned to work, a substantial number remain on the sidelines.
Real Wages and Inflation: Are Families Better Off?
BIDEN CLAIM: The Biden administration argues that American families are “better off than before the pandemic,” citing increased net worth, higher inflation-adjusted disposable incomes, and a lower uninsured rate.
FACT CHECK: A critical factor often overlooked in these claims is the impact of inflation. While nominal figures might suggest improvement, real wages, which account for inflation, paint a different picture. Real wages have decreased by over 5% since President Biden assumed office.
The average American worker has experienced a loss of over $4,900 in real wages since the start of the Biden presidency. This erosion of purchasing power significantly impacts family finances, offsetting any nominal gains.
Inflation and Cost of Living: Still a Crisis?
BIDEN CLAIM: The White House points to “inflation has come down 11 months in a row” as evidence of their success in tackling rising costs.
FACT CHECK: While the rate of inflation may have decreased from its peak, prices remain significantly elevated. Americans are still grappling with the effects of a substantial inflation surge. Prices are up 15.5% overall since Biden took office.
Inflation remains more than three times higher than it was just a couple of years ago. The average family of four now spends an additional $13,717 per year, or $1,143 per month, to maintain the same standard of living as in January 2021. This persistent high inflation continues to strain household budgets across the country.
“Historic Investments”: Helping Whom?
BIDEN CLAIM: President Biden and Congressional Democrats tout “historic Investments in America” leading to “800,000 manufacturing jobs” and “nearly doubling manufacturing construction.”
FACT CHECK: While investments have been made, questions arise about their effectiveness in broadly benefiting the middle class and bolstering American economic independence. Significant portions of these investments are directed towards green energy initiatives, which heavily rely on supply chains dominated by countries like China.
China controls over 50% of the processing capacity for crucial electric vehicle battery inputs like lithium, cobalt, and graphite. This influence extends to approximately 90% in manufacturing and processing various battery materials. Similarly, China dominates the solar and wind energy sectors. This reliance raises concerns about the true beneficiaries of these “historic investments” and their impact on long-term American economic security.
Deficit and Spending: Trillions in Partisan Spending
BIDEN CLAIM: The Biden administration asserts to have “signed legislation to reduce the deficit by more than $1 trillion.”
FACT CHECK: Despite claims of deficit reduction, government spending under the current administration has significantly increased, driving up the national debt. Had spending remained at pre-Biden levels, the 2022 budget deficit would have been substantially lower, potentially the lowest since 2001.
Government spending is a primary driver of deficits, and President Biden and Congressional Democrats have engaged in what has been described as an unprecedented $11 trillion partisan spending spree. This includes initiatives like student loan waivers, an expanded IRS budget, and bailouts of union pension plans, adding trillions to the national debt.
Tax Cuts: Who Benefits Most?
BIDEN CLAIM: Democrats criticize House Republicans for wanting to “enact massive tax cuts for the wealthiest Americans and largest corporations.”
FACT CHECK: Analysis of the Tax Cuts and Jobs Act of 2017 (TCJA) reveals a different picture. Tax cuts as a percentage of taxes paid were actually largest for the lowest-income Americans and smallest for the top 1%. Similarly, the percentage decrease in effective tax rates was greater for lower-income groups than for the highest earners.
Following the TCJA, higher-income taxpayers now contribute a larger share of overall taxes, indicating a more progressive income tax system. Meanwhile, increased IRS funding under the Biden administration has raised concerns about potential targeting of families earning under $400,000 a year, contradicting claims of focusing solely on the wealthiest.
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Economic Recovery: Strongest in the World?
BIDEN CLAIM: The Biden administration frequently claims “Our recovery is the strongest of any major economy.”
FACT CHECK: Economic indicators suggest a more nuanced reality. After experiencing two consecutive quarters of declining GDP in early 2022 – a traditional recession indicator – the administration shifted focus to alternative measures like Gross Domestic Income (GDI).
However, even these alternative measures are now showing negative trends. GDI has decreased in recent months, and Gross Domestic Output (GDO), considered a more comprehensive economic gauge, has experienced negative growth in 4 out of the last 5 quarters. These indicators raise concerns about the strength and sustainability of the current economic recovery.
Family Economic Security: Pre-Pandemic Strength?
BIDEN CLAIM: The White House maintains that “Family economic security is stronger than pre-pandemic.”
FACT CHECK: Key indicators of family financial health suggest otherwise. Household net worth, adjusted for inflation, is lower than when President Biden took office. Credit card debt, also inflation-adjusted, is significantly higher.
Perhaps most strikingly, the monthly mortgage payment on an average home has doubled during Biden’s presidency, escalating from $1,300 to $2,600. These factors indicate a weakening, not strengthening, of family economic security compared to pre-pandemic levels.
Energy Prices: Gas Prices Down?
BIDEN CLAIM: The administration highlights that “Gas prices are down from their summer 2022 peak.”
FACT CHECK: While gas prices may have decreased from a specific peak, they remain considerably higher than when President Biden assumed office. Energy prices, in general, are significantly elevated, contributing to higher costs for consumers across various sectors.
In conclusion, a detailed examination of key economic indicators reveals a mixed and often concerning picture when comparing the Biden and Trump economies. While the Biden administration emphasizes certain positive metrics, a closer look, supported by factual data, suggests a less optimistic assessment. Real wages are down, inflation remains high, and family financial security appears weakened in several key areas. Understanding these facts is crucial for a clear-eyed view of the current economic landscape.
