Apparently believing that the more you repeat a lie the truer it becomes, President Biden recently quoted a Time article claiming that "President Trump is receiving the strongest economy in modern history."
The Time article was little more than a setup designed to position Democrats to take credit for the inevitable Trump economic boom – as I noted on these pages just four days before Biden repeated this audacious claim. Expect similar efforts from the Left as they attempt to rewrite economic history in hopes that our memories are weak enough – and our gullibility strong enough – to overcome economic reality.
The fact is, Biden is handing Trump an economy on the precipice of disaster. Thanks in large part to Biden’s four-year deficit spending spree, the economy is shackled by an incomprehensibly huge $36 trillion in debt and $1 trillion less in Treasury cash on hand. That debt is growing exponentially, with interest alone now consuming over $1.1 trillion annually.
And while Biden has been touting jobs numbers, those estimates keep getting revised down after wildly overoptimistic initial reports. The Federal Reserve Bank of Philadelphia just estimated that net job growth in the second quarter of this year was likely negative, meaning employment was falling.
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Add in inflation that is once again accelerating by every measure, and you have some understanding of the debt-ridden, inflationary, dumpster-fire economy Trump is actually inheriting.
So, what is Biden talking about?
Of course, much of Biden’s speech was laced with false and misleading data woven into generalities about Bidenomics "growing the economy from the middle out and the bottom up" (which means absolutely nothing) and the evils of "trickle-down economics" (which exists only in the minds of the economically illiterate). Biden actually blamed nonexistent trickle-down economics for creating "bigger deficits." I guess he had to blame something.
But, seriously, bigger than what?
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There has never been a bigger federal deficit than the one Biden is handing off – other than in times of severe national crises. But we are not facing a severe national crisis. The pandemic is long over and we are not at war. Nonetheless, the federal debt is 121% of our gross national product – the level at which it peaked during World War II!
For a more recent comparison, our annual federal deficit was just under $1 trillion in 2019 heading into the pandemic. In 2022, following the pandemic, it was about $1.4 trillion. For the most recent fiscal year (ending Sept. 30), Biden’s runaway-train spending deficit hit a stunning $1.8 trillion, an 80% increase from pre-pandemic levels. Now that’s big.
For some perspective, at over $1.1 trillion annually, interest alone on our federal debt now exceeds our entire pre-pandemic annual federal deficit.
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Why? A feedback loop of excessive government spending. First, Biden’s reckless spending regime set off inflation (as even the Democrats’ economist emeritus Larry Summers warned it would). That inflation then induced the Fed to raise interest rates. Now Biden has the economy in a death spiral of higher debt levels and higher interest rates driving each other – and his deficit spending spree continues.
How quickly are things spiraling out of control? Very quickly!
In October and November 2023, the federal deficit was $380 billion. For the same months this year, it's already $624 billion, a shocking 64% increase over last year with no plan in place to constrain it. None.
This is the actual economy "Trump is receiving." Rather than the "strongest economy in modern history," it’s a house of cards built on federal debt, creating what is one of – if not the – most dangerous economies in modern history.
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So, what is Biden’s proposed solution? Piling the ridiculous atop the absurd, Biden stated that it is his "profound hope that the new administration will preserve and build on [his] progress." He actually said this.
Why? Well, according to Biden, things are getting better as inflation has declined "to pre-pandemic levels" while "wages have increased." Of course, as most Americans know, neither statement is true.
In Trump’s first term, the average year-over-year inflation rate was 1.9%. When Biden took office in January 2021, annual inflation was 1.4%. Following its June 2021 peak at 9%, the inflation rate under Biden never declined to the Fed’s 2% target – let alone "pre-pandemic levels" – and is currently increasing by literally every measure, with inflation around 3% or higher becoming the new normal.
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As for wages going up, keep in mind that inflation is a tax. So, while the average American’s weekly paycheck was a record high $1,221.42 in November, that paycheck could purchase $176.86 less than nominally smaller average paychecks when Biden took office. This is because real weekly wages (the number on your paycheck minus inflation) are down 3% since Biden took the economic reins. That is not what most people consider an increase.
Real wages were up 6.8% under Trump. Now that was an increase.
So, with crocodile tears, Biden bemoans the possibility that we could "backslide to an economy that benefited those at the top, while working people and the middle-class struggle" to get "a fair share of growth." Does anyone honestly believe that inflation-strapped working- and middle-class Americans are getting a fair share under Bidenomics? The people benefiting in today’s economy are those who own stocks, interest-bearing securities or real estate. In other words, "those at the top." That is what Bidenomics produced.
As a reminder for the outgoing president, in 2019 under Trump, the unemployment rate declined to historic lows for every race and both sexes, family incomes hit historic highs, the poverty rate hit an historic low, and income inequality declined – all with inflation below 2%.
Honestly, the misery of "the strongest economy in modern history" cannot end soon enough.
