President Biden must hope that America has forgotten former President Reagan’s famous question about the economy. The reason? Because economically, Americans fare worse and worse under Biden. This is not the product of exaggeration; instead, it’s the product of inflation and expectation.
In his only debate with then-President Carter in 1980, Reagan asked America a simple question: “Are you better off than you were four years ago?” Elegant simplicity itself, the question distilled the complexities of economics to their essential kernel: How’re you doing?
In 1980, there was only one answer economically. After it was acknowledged, there was only one outcome politically: Carter had to go.
One debate, 10 words, one outcome: Carter was trounced in November.
Forty-four years later, Biden had better hope that former President Trump doesn’t again ask America Reagan’s question. Because while the economy has been “meh,” inflation has been “ugh.”
Biden’s economy has been tepid at best — a far cry from the “strong economy” the administration keeps trying to tout.
According to Bureau of Economic Analysis data, despite the boost following COVID’s 2020 devastation —when America’s economy shrank 2.2 percent and rebound plus growth should deliver a double shot — Biden’s first year in 2021 only produced 5.8 percent growth. In 2022, it fell to 1.9 percent.
Last year’s growth was 2.2 percent in the first quarter, 2.1 percent in the second quarter and 4.9 percent in the third quarter, with 3.3 percent in the fourth — all told making for 2.5 percent growth in 2023. However, to finish out Biden’s four years, the CBO projects 1.5 percent growth in 2024. To finish out Biden’s four years, the CBO also projects 1.5 percent growth in 2024.
That’s anything but the “strong economy” the administration keeps trumpeting. Still, it’s a whole lot better than Biden’s inflation record.
Almost from the moment Biden took office, inflation took off. It grew 1.4 percent in January 2021; by May it was running at 5 percent; by December 2021, it was 7 percent. In 2022, it went higher, forcing the Federal Reserve to begin raising rates in May. By June, inflation hit 9.1 percent, the highest level in 40 years. Overall, the Fed would raise interest rates 11 times, taking them from 0.25 percent to 0.50 percent, to 5.25 percent to 5.50 percent in just more than a dizzying year.
Little wonder that three years in, Americans have lost ground economically under Biden. As the folks at the Committee to Unleash Prosperity pointed out in December, American employees have seen their real hourly wages — the net of inflation’s impact — shrink over 3 percent over the first 35 months of Biden’s presidency.
The fuel to Biden’s inflation fire has been his uncontrolled spending. In his first three years in office, Biden has spent $5.9 trillion above the 2019 pre-pandemic spending level; according to CBO estimates, over four years the total will be $7.9 trillion. During that time, despite the increased revenues from Republicans’ 2017 pro-growth tax cuts and Biden’s own tax increases, he has still managed to run enormous deficits: 12.1 percent in 2021, 5.4 percent in 2022 and 6.3 percent in 2023.
All told, that’s a cumulative deficit of 23.8 percent of GDP — almost a quarter of what the U.S. economy would produce in a year.
As bad as this spending binge has been, it would have been worse if Biden had gotten his way. Remember: two Senate Democrats stopped him from spending even more, while it took the Supreme Court to block him from forgiving $400 billion in student loans.
No wonder then that a CBS News/YouGov poll taken Jan. 10-12 found that only about 1 in 5 Americans felt they would be personally better off financially if Biden won reelection, compared to 49 percent who felt they would be if Trump won.
Americans are not just saying, as they did to Carter in 1980, that they are not better off than were four years ago, they are saying they also don’t expect to be better off four years from now if Biden is reelected. Such a verdict means that Biden is out-Cartering Carter on the economy.
GDP can be a deceptive economic indicator, a combination of several macro variables of which government spending and so-called government “investment” are two. It is therefore not surprising to see how Biden’s profligate spending has aided it. Yet even so, with all Biden’s deficits and debt pushing it, the economy is still not “strong,” as the administration claims.
In contrast, inflation and interest rates are pervasive, personal indicators: affecting people where they live — in what they buy and in what they borrow. These are also the reasons why an earlier CBS News/YouGov poll conducted Jan. 3-5 found only 36 percent approved (64 percent disapproved) of Biden’s handling of the economy and only 33 percent approved (67 disapproved) of his handling of inflation.
While the Biden administration can talk all it wants from its bully pulpit, Americans are listening through their wallets. And they are hearing the echoes of Reagan’s question.
J.T. Young was a professional staffer in the House and Senate from 1987-2000, served in the Department of Treasury and Office of Management and Budget from 2001-2004, and was director of government relations for a Fortune 20 company from 2004-2023.