What Is Bidenomics? In a word, failure.
This is painfully apparent every time the president tries to defend his indefensible economic record. Consider his recent speech in Chicago. Short on facts and long on rhetoric, President Joe Biden attacked the strawman of “trickle-down” economics while espousing the virtues of “Bidenomics.”
Unfortunately, his narrative ran directly contrary to the data, including the data from his own administration.
While the president paints the last 40 years of economic history as the implementation of failed economic theory, at no point in those four decades of supposed failure did we ever have inflation as high as we’ve seen during his presidency.
But a year and a half after Biden took office, he had spurred inflation on so fast that prices were rising in a single month about as fast as they rose in the entire year before he took office. That inflation was caused by profligate spending, financed by borrowed and printed money.
And that spending is Biden’s second misrepresentation. He claims he reduced the deficit, but nothing could be further from the truth. If Biden had merely done nothing, the expiration of one-time COVID expenditures would’ve drastically reduced the deficit, and we’d actually have a surplus today. Instead, the president has run up massive deficits by signing new spending bills.
In the current fiscal year, the cumulative deficit in the first five months eclipsed the cumulative deficit in the first 11 months of the previous fiscal year. In other words, Biden is overspending at about twice the rate he was a year ago.
And that federal profligacy has devastated American families by destroying real wage growth and increasing borrowing costs. Since Biden took office, nominal hourly earnings have jumped a healthy 11.8%, but prices have risen even faster, making those larger paychecks worth less than before.
Additionally, Biden’s growing government is crowding out private economic activity, especially private fixed investment. That has contributed to slowing the economy, which in turn has caused weekly hours to be cut. The result is real weekly earnings down 5.1% since Biden took office.
For the average American family, their weekly paychecks have grown about $200, but those larger paychecks now buy about $100 less. The result is the equivalent of a $5,600 annual pay cut. It’s no wonder two-third of Americans disapprove of Biden’s handling of the economy — they’re demonstrably poorer since he took office.
To see just how devastating this is, consider that annual inflation has exceeded nominal weekly earnings growth for 26 consecutive months – a record. But instead of addressing these very real concerns, Biden decided to attack straw men.
Invoking the specter of “trickle-down” economics, Biden blamed all the problems he himself created on this ill-defined collection of ideas. Judging by his talking points, “trickle-down” economics means reducing taxes exclusively for the wealthy, but I have taught macroeconomic theory, and I’ve never seen the term defined at all, let alone as such.
Besides “trickle-down” not being a recognized economic theory, it has not been defended, let alone implemented, by Biden’s predecessors over the last 40 years. For example, former President Donald Trump signed a tax cut that disproportionately benefited lower-income earners, and even raised taxes on some higher-income earners. Similarly, former President Ronald Reagan reduced taxes across the board, and although higher-income earners saw the largest tax reductions, real wages rose across every income group as both inflation and unemployment fell.
This is in stark contrast to Biden’s policies, which have hurt nearly everyone, but lower-income earners the hardest, contrary to Biden’s claims. While the president says real earnings for the bottom half of workers have increased since he took office, his own administration’s data says the opposite.
Real earnings for the first and second income quartiles are down more than 2% and 3% respectively. Since these are the two groups that make up the bottom half of earners, it’s impossible for Biden’s claim to be true.
The president’s economic policies have been disastrous. Simply put, American families cannot afford to live in Biden’s America. With falling real wages, persistent inflation, and record levels of both consumer and federal debt, Bidenomics can be summed up in a single word: failure.
E.J. Antoni is a public finance economist at The Heritage Foundation.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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