As The Election Approaches, People Worry About the Economy. That is Normal

Some Think the Republicans Can Manage It Better. That is Not Normal – Nor Accurate

What are the Main Issues?

There seems to be four main issues at large:

Inflation: The economic devil that threatens all, especially the middle class. Remember the early 198’s and 18% mortgages? Once out of hand, this is a tough one to beat into submission.

Fuel Prices: The first element of inflation always called out. Affects everyone. If we were further along with electric or hybrid cars and trucks, this would be less of an issue but at this moment, it bites, and people note it.

The Deficit: When the government spends more than it takes in, the deficit grows, which dries up money that would otherwise be available for loans, and it burdens future generations.

Immigration Effects on Employment: This is false boogie man that the Right keeps fueling. In fact, we are desperately short works; an enlightened immigration policy would help tremendously. But not everyone gets that, do they?

What Has the Administration Done So Far?

 About everything an Administration can do, this one has done and is doing, a challenge especially given the challenges in Congress. They have also pretty well coordinated actions and priorities with the Federal Reserve, to good effect This does not always happen. The fact that it is gives us our best hope to cap and reduce inflation.

The use of the Strategic Petroleum Reserve has some minimal effect, and more effect psychologically. Biden is making good use of it. Jawboning the energy companies, looking (finally, USG) and redefining our relationship with Saudi Arabia, and other steps are helping on the fuel issue.

A certain degree of inflation was inevitable, given a two year hiatus on spending in almost every sector during the worst of COVID. The Russian War on Ukraine has also fueled much inflation. Much of the spending the Biden team has gotten into law and actual cash flow has been well targeted to help lower and middle class citizens, thus not fueling inflation in any meaningful way. Much of the inflation factors are international in origin and there is only so much a nation can do to minimize their impact.

Several different efforts are underway to control immigration flow without the cruelty (and possibly illegal under international law) politics of the Trump administration. There is a heavy flow, for sure, but it is not the “they are overrunning us” propaganda that Republicans roll out for every election.

Biden predicted that his economic initiatives would increase government revenue and lower the deficit. That is what happened. More on that in the next section.

How Do We Compare to the Rest of the Developed World?

In a word, FABULOUSLY. The rest of the world would give anything to have our numbers.

In every benchmark of national economics, we are better off than every other advanced nation. Our fuel prices are much lower than that of the rest of the developed world. The US deficit is actually going down. America’s inflation rate is lower than the rest of the developed world. Our employment levels and new job creation are at record levels.

A few examples of those good numbers (thanks to An American Heather for this data breakout):

  • Since Biden took office, the nation has added 10 million jobs and has seen unemployment drop to 3.5%, a 50-year low. In 11 states, unemployment is at all-time lows, and 17 states have unemployment rates under 3%.
  • The country has added almost 700,000 manufacturing jobs during his presidency. Companies are continuing to invest in new industries, at the same time and we are – finally – rebuilding our roads, airports, bridges, and ports. Note that under Trumps Trillion dollar+ tax cut to large companies and the wealthy, none of that came back in jobs or infrastructure investment – none of it.
  • Republicans always say that Democrats rack up government debt, mostly with social welfare spending. Biden’s investment in the nation has improved the country in many ways and cut the deficit while at it. So far, the deficit is down this year by $1.4 trillion, the largest-ever decline in the federal deficit. Last year’s it was $350 billion.
The Irony of It All

I would take a moment to note that many of those who blame Biden for inflation, etc. and say he should “do more” are often the same ones who are always crying out about too much government interface in the economy and in the business sector.

Just a bit two-faced, I think.

 What is the History of Who Best Manages the Economy? The Results are Clear

The deficit climbed every year of the Trump presidency, including in the years before the pandemic. Trump and his Congressional supporters added $400 billion to the deficit, primarily because of their $2 trillion tax cut for the wealthy and for corporations – again, with no return for America. Let’s look at the facts, the actual numbers.

Republicans always say they can boost the economy to produce higher tax revenues and thus balance the budget by way of tax cuts to the wealthy. It does not work, never has, never will. Republican presidents going back almost 50 years, since Ronald Reagan, have exploded deficits, Reagan sent the deficit from $70 billion to $175 billion.

George H.W. Bush took it to $300 billion, George W. Bush took it back up to $1.2 trillion with unfunded wars., after Clinton had zeroed it out. And Trump’s tax cuts sent it skyrocketing again, even before pandemic spending sent it higher still.

The Republicans soared the deficit, every time, mostly by giving money away to those who did not need it.

What about the Democrats?

Turns out, they have regularly brought deficits down. Bill Clinton—with help from Bush’s willingness to raise taxes—got the deficit to zero. Barack Obama cut back George W. Bush’s $1.2 Trillion deficit down to $600 billion.

Every time, the Democrats cut the deficit, while investing in the country. The Republicans ran up the deficit, while giving gifts to their buddies. The numbers don’t lie, decade after decade.

Do The Math

Republican supply-side economics have never worked. Heck, an early version of them gave us the Great Depression. the Democrats’ version of the economy actually works. Not to say the Democrats have always done well here: Johnson ballooned our deficit with his “Guns and Butter” approach of trying to have everything and not paying for it, and Jimmy Carter failed to control inflation (as did Ford, for that matter).

But overall, the record is clear. The Democrats run far better economics. The Republicans have a theology, not an economic philosophy. Follow them and face ruin, every time. And they are specifically calling to do more of the same, given the power. How about making Social Security and Medicare optional programs to be funded or not every 5 years. Sound like a sensible plan to you? Yeah, I don’t think so, either.

What are the Republicans Promising?

 Republicans have told us in several forums what they will do if given the chance. They will pass massive tax cuts for the wealthy, after which they plan to repeal the administration’s actions—like the ability of Medicare to negotiate with pharmaceutical companies, After their plan explodes the deficit again, they would cut Medicare and Social Security, and more. We have been to this dance before.

Here is a Tip on How to Vote

An election is in part a vote about the incumbents, but it is also about who leads going forward, as the president said in an interview this week. One may well dislike things about Biden. but no rational person could conclude their economic approach would work or is better for the country.

I really don’t favor blanket voting, i.e., support every Democrat and defeat every Republican. That is generally too simplistic and hurts the two party system. But we are in a different place today. Today vote Democratic across the board and work hard to defeat every Republican.

Until we get a sane and moral center right party, the one still standing that used to be such a party needs to be burned down and something better built in its place.

            Bill Clontz

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1 reply to As The Election Approaches, People Worry About the Economy. That is Normal

  1. Agree!! We simply have to influence the independents. Most of the republicans are lost, it seems.
    Thank you Bill.

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