The Biden-Harris economy is the “envy of the world”
According to many analysts, under Trump's plans, inflation would be higher, growth would be lower, interest rates would be higher and the deficit would be higher
The economy, measured by the GDP, has grown 12.6 % since Joe Biden became President. This is the highest overall growth rate in one term in the last 25 years (since, you might remember him, Democrat Bill Clinton).
Several measures of inflation have fallen to 2 %, including the producer’s price index (2.1 %), and the GDP price index (1.8 %).
Unemployment has remained at or near 4 % for three years. Under the Biden-Harris administration, more than 16 million jobs have been created (compared to Trump’s loss of 2.7 million jobs, the first President to lose jobs since Herbert Hoover in 1932).
Biden-Harris have created more than 800,000 manufacturing jobs; this contrasts with 177,000 manufacturing jobs lost under Trump. This has not been happenstance: it responds to the legislation passed by Biden-Harris and the Democrats: the infrastructure bill, the Inflation Reduction Act (which also promoted green technologies), the CHIPS Act, among others.
This has been the softest of soft landings, bringing inflation down without increasing unemployment and keeping a robust economic growth. The GDP is actually higher than the pre-pandemic projections for 2024, and it is by far the highest growth among the G-7 countries (some G-7 countries have hardly grown in the past four years).
You might say, OK, inflation has come down, but prices are still higher (21 % higher). Which is true. But it is also true that wages have increased by more, 25 %, so real wages (adjusted for inflation) have increased by 4 %. That is, the purchasing power of families has increased.
Real GDP per capita (real means adjusted for inflation) has risen by 9.4 % since 2019; the Real Personal Income per Capita (excluding government transfers) has increased by 7.3 % in the same period.
Real wages for production and non-supervisory personnel have increased from $29.14 to $30.33 per hour (in 2024 dollars), and they are the highest they have ever been.
The real net worth per household for the bottom 50 % of the income distribution is 56 % greater now than in 2019; the real net worth for the 50th to 90th percentiles has risen by 21 % in the same period.
The stock market (measured by the S&P Index) has increased by 48 % since Biden-Harris entered office. Remember Trump claimed Biden would crash the stock market, and routinely calls Kamala Harris a communist, which is laughable.
The budget deficit, which stood at 11.8 % of GDP when Trump’s government ended, is now at 6.3 %. However, independent budget analysts estimate that Trump’s plans would increase the national debt by $7.75 trillion (added to the $8 trillion his previous administration already added), while Kamala Harris’ plans would be 50 % lower.
The Economist published last week that the U.S. economy under Biden-Harris is “the envy of the world”. The added: “America’s economy is bigger and better than ever… Over the past three decades America has left the rest of the rich world in the dust. In 1990 it accounted for about two-fifths of the GDP of the G7. Today it makes up half. Output per person is now about 30% higher than in western Europe and Canada, and 60% higher than in Japan—gaps that have roughly doubled since 1990. Mississippi may be America’s poorest state, but its hard-working residents earn, on average, more than Brits, Canadians or Germans.”
All economic analysts that have studied Trump and Harris’ economic plans have reached the same conclusion: under Trump, inflation would be higher, growth would be lower, interest rates would be higher, and the budget deficit/public debt would be higher. This includes a Wall Street Journal survey of Wall Street economists (see chart below); as well as 23 Nobel laureates in Economics; Goldman Sachs; Nomura; Moody’s; and the Wharton Business School, among others.
The Economist endorsed Kamala Harris today. They highlight that “A second Trump term comes with unacceptable risks… By making Mr. Trump leader of the free world, Americans would be gambling with the economy, the rule of law and international peace”.
The magazine adds that “today the risks are larger. And that is because Mr. Trump’s policies are worse, the world is more perilous and many of the sober, responsible people who reined in his worst instincts during his first term have been replaced by true believers, toadies and chancers.” They also worry about his foreign policy, in a time of war: “his glib promises to bring peace to Ukraine in a day, and his open-ended encouragement of Israel’s offensives, are not reassuring. Even worse is his contempt for alliances”, such as NATO.
Chart by David Doney, https://x.com/David_Charts/status/1851829033694114115
Source: Wall Street Journal