WASHINGTON – Four years ago was a moment of chaos and anxiety.
The number of fatalities increased as COVID-19 spread. The financial markets went into meltdown. For a little while, oil prices dropped.
To counteract the unexpected recession, the Federal Reserve cut its benchmark interest rate. To keep families and companies viable, the U.S. government embarked on a historic borrowing binge that added trillions to the nation’s debt.
But when the former president relived that occasion at a recent rally, he beamingly displayed his pride.
“We had the best economy in history,” the Wisconsin Republican declared to his audience. “Your mortgage rates were 2.65%, which was the lowest 30-year mortgage rate ever recorded at that time.”
The outcome of the presidential election in November may depend on who can manage the American economy the best. Although Americans were most inclined to rank immigration as the nation’s biggest issue, the overall state of the economy and inflation also ranked highly in an April Gallup poll.
An April poll by The Associated Press-NORC Center for Public Affairs suggests that when it comes to important economic issues, President Trump may be ahead of President Joe Biden. According to the survey, Americans were more likely to believe that Trump has lowered living expenses and created jobs while in office. Approximately 60% of Americans claimed that the country’s cost of living increased during Biden’s presidency.
However, the economic data reveals a much more nuanced picture of the situation under Trump’s presidency. His tax cuts never produced the growth that was anticipated. Under Biden, his budget deficits increased sharply and remained elevated. The factory jobs that were lost were never fully restored by his trade agreements and tariffs.
Things to Know About the Election of 2024
Democracy: Since 2020, the American democracy has weathered significant stress tests. There will be further difficulties in 2024.
The Function of AP: Since its founding in 1848, the Associated Press has been the most reliable source of information on election night. Find out more.
SEE MORE – President Biden Applauds Morehouse Grad’s Appeal For Gaza Cease-Fire At Graduation
And then there was the pandemic, which led to both low inflation, for which Trump takes full credit, and massive job losses, for which he accepts no accountability.
If anything, Trump’s economic promises were never fulfilled during his administration.
A DECENT RISE (NOT ABOVE PAR)
In 2017, Trump assured the public that his tax cuts would boost the U.S. economy by “3%,” but he also said, “I think it could go to 4, 5, and maybe even 6%, ultimately.”
The Bureau of Economic Analysis estimates that growth after inflation averaged 2.67% under Trump, excluding the 2020 pandemic. When you factor in the recession brought on by the pandemic, that average falls to a pitiful 1.45%.
In comparison, the average growth rate for the second term of former President Barack Obama was 2.33%. The average annual growth rate under Biden is 3.4% thus far.
Increasing Public Debt
Additionally, Trump gave the populace assurances that stronger growth would enable his tax cuts to be fully offset. Although the cuts were widespread, they disproportionately benefited corporations and the extremely wealthy.
Trump’s promises to reduce the budget were never met by the tax cuts that were enacted into law in 2017.
The Office of Management and Budget reports that in 2018, the deficit grew to $779 billion. The tax cuts boosted borrowing by $216 billion in the first year since the Congressional Budget Office had projected a $563 billion deficit before the cuts. The deficit in 2019 increased to $984 billion, over $300 billion higher than the CBO had predicted.
After the pandemic struck, the government rushed to help, but the deficit grew to more than $3.1 trillion. While the economy was in lockdown, the government was able to make direct payments to people and small businesses thanks to this borrowing, which frequently increased bank balances and improved the lives of many even though the country was experiencing a recession.
Under Biden, who also signed into law a third round of pandemic aid along with other programs to address climate change, construct infrastructure, and invest in U.S. manufacturing, deficits have also run high. $2.8 trillion (2021), $1.38 trillion (2022), and $1.7 trillion (2023) are his budget deficits.
SEE MORE – Israeli Military Finds Bodies Of Three Gaza Hostages, Including Festivalgoer Shani Louk
In a report released on Wednesday, the CBO projected that the continuation of a portion of Trump’s tax cuts that are scheduled to expire after 2025 would result in an additional $4.6 trillion in debt by the year 2034.
LOW INFLATION (YET NOT IN ALL CASES FOR RIGHTS)
According to the Bureau of Labor Statistics, inflation was significantly lower under Trump, never rising beyond an annual average of 2.4%. Under Biden, the yearly rate rose to 8% in 2022 and is currently 3.4%.
The aftermath of the 2008 financial crisis, initiatives taken by the Federal Reserve, and the coronavirus pandemic were the three main causes of the low inflation that occurred during Trump’s presidency.
Due in large part to the delayed recovery from the Great Recession—during which the financial markets crashed and millions of people lost their homes to foreclosure—Trump took office with low inflation.
During Obama’s second term, the inflation rate barely increased to 1% on average as the Fed failed to boost GDP. Nevertheless, the economy was growing without becoming too hot.
Nonetheless, inflation averaged 2.1% throughout the first three years of Trump’s administration, which is rather near to the Fed’s target. However, to maintain low inflation at the central bank’s own 2% target, the Fed started raising its mark rate. Trump constantly attacked the Fed because he was interested in boosting growth at the expense of increased prices.
The Epidemic Struck Next
To keep the economy going during lockdowns, the Fed lowered interest rates as inflation plummeted.
Trump is celebrating historically low mortgage rates since the pandemic harmed the economy. Similar to this, as the virus expanded in April 2020, gas prices dropped below an average of $2 per gallon since no one was driving.
A REDUCE IN JOBS
The Bureau of Labor Statistics estimates that during Trump’s administration, the US shed 2.7 million jobs. He added 6.7 million employment, excluding the epidemic months.
In comparison, during Biden’s administration, 15.4 million new jobs were created. That is 5.1 million more jobs than the CBO predicted he would create before to passage of his coronavirus relief and other initiatives into law, demonstrating the extent to which Obama improved the labor market.
It is a pledge made by both politicians time and again to restore manufacturing jobs. From 2017 to mid-2019, 461,000 manufacturing jobs were added under Trump. However, during the pandemic, the increases stalled and eventually translated into layoffs; the Republican Party reported losing 178,000 jobs.
Under Biden’s presidency, the US economy has created 773,000 new manufacturing jobs thus far.
