On 13 October, Joe Biden gave a speech in Pennsylvania touting the economy and green energy, including massive public works spending and the supposed positive impact of green energy investments on US manufacturing concerns. This continues Biden’s longstanding economic narrative – that the US economy (and Americans in general) are doing well, and it’s all due to Bidenomics.
For example, back in June of this year, he made some astounding claims in Chicago about “restoring jobs”: “Today, the U.S. has the highest economic growth rate, leading the world economy since the pandemic,” the president said. “This helped create 13.4 million new jobs, more jobs in two years than any president has ever created before. Folks, it’s no accident. That’s Bidenomics in action.” Hold that thought.
And just this week, Treasury Secretary Janet Yellen continued the happy talk that the Biden economy is robust by stating that inflation has been considerably reduced, and that the Biden administration has passed some unspecified measures “[that] it hopes will help the fiscal situation in the near to medium term.” Asked about America’s ability to provide support to Israel after Hamas terror attack on 7 October, she claimed that the US can “absolutely” afford more war, and that “the American economy is doing extremely well,” as reported here.
These are fantasies; the reality differs diametrically from the bold claims of Biden and Yellen. Let us shed light on the disaster that is Bidenomics.
WE CAN AFFORD MORE WAR
Janet Yellen’s claim that the US can “absolutely” afford another war is patently false. From her Treasury Dept’s own Monthly Treasury Statement in June, a key graphic summarizes the “cumulative receipts, outlays, and surplus/deficit through Fiscal Year 2023.” The cumulative federal FY23 deficit reached $1,393 billion in June, meaning the US is borrowing over $1 trillion (!) per year to meet its commitments. This is bankruptcy by another name, and she thinks we can “afford” another war?
The impact of continuing Pelosi-level deficit spending on the US economy has had deleterious effects that cannot be hidden despite Biden administration efforts to put lipstick on a pig.
JOBS, JOBS, JOBS
Biden’s jobs claims obfuscate the reality. As noted by the Heritage Foundation’s EJ Antoni back in February, Biden’s job creation claims ring hollow, as Biden’s “spectacular growth” was a continuation of the recovery of jobs lost and then regained as a result of the national shutdown due to the pandemic, not due to actual “new job creation.”
What went unreported by the Biden administration and legacy media in the August jobs report was that there was a two-month loss of 670,000 full-time jobs, which was “the biggest 2-month plunge since the COVID lockdowns in early 2020,” as reported by ZeroHedge. During the same period, over one million part-time workers were added to the economy, with the total number of multiple job-holders nearly at record levels.
MORE BAD ECONOMIC SIGNS
If the jobs picture was as rosy as the Biden administration claims, then household income would be soaring. However, Breitbart reported on 12 September that household income sustained the biggest drop during 2022 in over a decade. The 2.3% drop was “the fourth worst year in records going back to 1985.” This is the reality of Biden’s “jobs economy.”
Coupled with the continued high inflation, Fox Business reported on 2 September that 61% of Americans were living paycheck to paycheck in July, including 78% of those making less than $50,000 per year.
To make ends meet, Americans have turned to credit cards, with the New York Fed reporting that credit card debt at the end of June topped $1.03 trillion for the first time ever. And the average interest rate for all cardholders paid in August was the highest on record at greater than 21%, according to the Federal Reserve, while total household debt soared to $17.06 trillion.
With all of these economic headwinds faced by Americans, it is no wonder that consumer sentiment dropped in October to the lowest level in six months, according to the University of Michigan’s consumer surveys reported by MarketWatch on 13 October. Meanwhile, that report reflected that inflation expectations were the highest since May. This is direct reflection of the pessimism about Americans’ ability to make ends meet that aligns with all the other bad economic news affecting consumer spending.
More bad news: according to The Wall Street Journal, the number of total existing-home sales is projected to reach only 4.1 million by the end of 2023, the lowest since the financial crisis of 2008. With the 30-year fixed-rate mortgage averaging 7.57% (the highest rate since 2000), FreddieMac reported on 12 October that “purchase demand [for housing] remains at a three-decade low.”
Businesses are suffering, too. RetailDive reported on 4 October that, “[i]n the first nine months of 2023, commercial Chapter 11 bankruptcies have soared 61% year over year to 4,553” while “[s]mall business filings … rose 41% to 1,419.” The rise in bankruptcies is driven by rising interest rates and inflation and the resultant increased borrowing costs to businesses, which partially explains the hemorrhaging of full-time jobs noted above.
Yet another symptom of problems with Bidenomics, Trending Economics reported that the September S&P Global US Manufacturing PMI figure “pointed to a fifth consecutive month of contraction in the sector's health, with new orders declining and “reflecting the impact of high interest rates and inflation on consumer demand.” Contraction does not equal growth; contraction in the US manufacturing sector leads to lower GDP numbers and the loss of manufacturing jobs.
THE MOTHER OF ALL PROBLEMS
High inflation has been roiling the economy since the massive omnibus bills passed in 2021. Inflation spiked to 9.1% in June 2022. Inflation affects every transaction throughout the economy, increasing costs at all levels of production, distribution, and sales. Efforts to tame inflation through rate hikes by the Federal Reserve have not succeeded in taming inflation, as noted by the Daily Caller News Foundation on 12 October: “The Consumer Price Index (CPI), a broad measure of the prices of everyday goods, increased 3.7% on an annual basis in September,” continuing to exceed the Fed’s 2% goal. This compares to the 1.7% mean inflation rate that Biden inherited from the Trump administration in January 2021, as reported by the Dallas Fed.
The federal deficit in fiscal year 2023 was $1.7 trillion, according to the Congressional Budget Office – equivalent to the entire federal budget in 2003, as linked on the White House website here. Unless the Republican House of Representatives can tame federal spending, these continuing deficits will eventually bankrupt the country, as debt service crowds out other federal spending and inflation continues to soar.
Bidenomics is delivering the worst of all worlds to Americans: continuing high inflation, stagnant economic growth (especially the manufacturing sector), rising consumer debt, record numbers of Americans holding multiple jobs to make ends meet, record levels of federal debt service, and plummeting consumer confidence. Quite the opposite of what Joe Biden and Janet Yellen have been claiming.
The end.