By Antonio Graceffo
The Biden White House keeps telling Americans that they are enjoying the best economy in years, but the data shows otherwise.
In June 2022, President Joe Biden claimed the United States was “the fastest-growing economy in the world.” This was complete nonsense. In the second quarter of 2023, U.S. GDP grew by 2.4 percent. India’s growth so far this year has been around 6 percent. Albania, Belgium, Bolivia, Cameroon, and a host of other countries have posted faster GDP growth than the United States.
Mainstream media claim that only the Republicans believe the economy is bad and heading toward a recession. However, an examination of the data confirms that the growth numbers are not the only things that Bidenomics got wrong and that the country is very close to a recession.
Since President Biden took office in January 2021, there has been nearly 13 percent cumulative inflation. But that is just an average. Some products increased by much more. Gas was $2.42 per gallon in 2021; it now costs $3.95, a 63 percent increase. Eggs used to be $1.67 per dozen, but in April, the average price was $3.27, with some parts of the country reporting prices as high as $7. Ground beef was $3.89 a pound in 2021; now it is $4.96. And just in the past year, new cars have increased almost 20 percent, frozen food by more than 12 percent, baby food by 10 percent, and rent by over 8 percent.
When the May jobs report came out, President Biden stated: “We have now created over 13 million jobs since I took office. That is more jobs in 28 months than any president has created in an entire four-year term.” This is a myth. In actuality, 72 percent of these allegedly new jobs were just people returning to work after the pandemic. The real number of jobs created by the Biden administration is 3.7 million.
Prior to the pandemic, then-President Donald Trump had created 6.7 million jobs. The labor force participation rate under President Biden is 0.7 percentage points lower than under the previous administration. Adjusting for population growth, this means that roughly 2 million more Americans are out of work now than under President Trump.
After shutting down the economy in response to the pandemic, the Biden administration went on a spending spree with the American Rescue Plan and other initiatives, securing approval for $4.8 trillion in additional debt generation. In the end, President Biden seemed very pleased with himself for putting a Band-Aid on the wound. One of the most ironic pieces of legislation was the Inflation Reduction Act. When he signed it into law in August 2022, inflation was at a 40-year high. The Act called for additional spending, which just added to the money supply, increasing inflation.
Most people think that inflation means that prices are going up. Actually, higher prices are just the result. Inflation is a loss in the value of your money caused by artificially low interest rates and government borrowing and spending. The Biden administration’s spending programs added trillions to the money supply, decreasing the purchasing power of your dollars. The Federal Reserve (Fed) interest rate hikes are starting to rein in the money supply, which is why inflation is diminishing. However, high interest rates hurt families wanting to buy cars, borrow money, or get mortgages. Also, these rate hikes would never have been needed if the administration had not flooded the economy with debt and spending.
Recently, the Biden administration took credit for reducing inflation, saying that the Inflation Reduction Act worked. But as stated above, President Biden did not bring down inflation. More spending did not reduce inflation, and most importantly, the Act did not bring down inflation—increasing the Fed rate did.
Also, people in the United States and elsewhere going back to work, with factories and shipping returning to some sort of normalcy, helped to reduce prices. The Fed rate is an artificial rate, not a market rate. It was set artificially low during the pandemic, which helped cause inflation. Now, it is artificially high, which is slowing the economy. If the monetary authorities are not careful, the economy could slow too much, pushing the nation into recession. What is more, the country would not be teetering on the brink of a recession if it were not for Bidenomics.
Another important point is that prices have not fallen. The inflation rate was 7 percent in 2021, 6 percent in 2022, and 3.2 percent this year. Not only is 3.2 percent above the normal 2–3 percent target set by the Fed but these numbers, whether they are 7 percent or 3.2 percent, are the rate at which prices are increasing. So the Biden administration did not actually bring down prices. And it did not prevent prices from rising more. It has just slowed the rate at which they are increasing. If this counts as a victory, there needs to be a new metric of evaluation.