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Friday, December 13, 2024
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Trump / Biden – Harris and the Economy

As the November election approaches, wouldn’t it be nice if important policy is­sues took precedence in news coverage over stories about who in­sulted whom? Main­stream media seems to favor covering person­ality squabbles over more substantive top­ics. The fact that the national media is fixat­ed on name calling and who is and isn’t giving interviews to the press is just weird. Oops. Sorry!

People tend to hold politicians account­able for the state of the economy and while this is understandable and justifiable to some degree, the fact is that a macroeconomy is a slow moving beast and is influenced by a number of factors that sitting Presidents have limited control over in one four year term. This article seeks to give an overview of the economic policies of the Trump and Biden – Harris administrations and the impact that each have had on the economy that we are experiencing today.

Trump’s Econom­ic Plan: The Tax Cuts And Jobs Acts of 2017 was Trump’s signature economic plan. It in­cluded a $1.9 billion tax cut that slashed corporate rates and ac­cording to the Center for American Progress “changed the way the nation taxes profits of U.S. multinational corporations. It also temporarily cut per­sonal income and es­tate taxes, changes that largely benefited the wealthy”. In a report published in 2020 by the conservative Cato Institute, author Scott Lincicome begins his assessment of Trump’s economic policies by writing, “For the last four years, formal U.S. economic policy has all too often resulted from frantic, messy at­tempts by beleaguered government officials to backfill disconnect­ed policy trenches dug by presidential tweets. That’s no way to run economic policy, and it shows.” Lincicome’s view of the Trump tax cut is mixed at best. On the positive side, the cuts reduced the United States’ “un­competitive corporate tax rate”. Lincicome was of the opinion that “the tax cut wasn’t a massive giveaway to the rich, certain upper middle-class taxpay­ers saw smaller effec­tive reductions than 1 percenters”. Mid­dle class and working class folks did not fig­ure into Lincicome’s assessment. Trump’s assertion that the tax cuts would pay for themselves didn’t pan out. We are often told that these kinds of tax breaks will “trick­le down” to the rest of us in the form of corporate expansion, modernization of pro­duction facilities and more jobs. Lincicome acknowledges that the results of the Trump tax cuts were “gener­ally disappointing”, noting that there was only significant corpo­rate investment for “a few months, and then business investment slumped again”.

Biden’s Econom­ic Plan: The Biden – Harris administra­tion enacted multiple initiatives in order to address the economic crisis imposed by the pandemic. The Amer­ican Rescue Plan Act (ARPC) was signed into law in March of 2021. The program provided guaranteed direct funding to all cities, towns and vil­lages in the U.S. With guidance from the Federal Government, local municipalities were able to use the dollars they were al­located as they saw fit to best help their citi­zens and businesses stay afloat in the face of the worst aspects of the pandemic. It is unusual for economic policies to be aimed at helping everyone. The Biden – Harris admin­istration took care in crafting the ARPC to make sure that it was equitable for all Amer­icans. According to a report by The Trea­sury Department pub­lished in October of 2023, “the American Rescue Plan effective­ly delivered resources and aid to historically underserved commu­nities, enabling eco­nomic recovery far more quickly than in previous downturns”. Other Biden – Harris initiatives include The CHIPS Act which is spurring investments across a number of states to develop high-tech semiconductor research and manufac­turing facilities and is creating jobs. The Bi­partisan Infrastructure Act has created jobs while addressing the need for investment in repairing and maintain­ing America’s roads, bridges, airports, rail­roads, ports, the pow­er grid and other long neglected infrastruc­ture projects. The In­flation Reduction Act (IRA), will provide $8.8 billion in home energy efficiency and electrification projects and is expected to save American families $1,000 a year in en­ergy costs. While the IRA will help America reach its climate goals to reduce greenhouse gasses, a report put out by the Alliance For Citizen Engagement acknowledges that the American Petroleum Institute, the National Association of Man­ufacturers and most Republican legislators have given a “thumbs down” to the IRA be­cause they oppose the regulations and taxes that are included in the bill. Be that as it may, in an article pub­lished last February in UPI, economists stat­ed that under Biden’s economic policies and the performance of the U.S. economy, the prevailing sentiment is that the “economic re­covery under the Biden – Harris administration has been exceptional. Economists will be studying the recovery for years to “determine if it is attributed to Biden’s policies, luck, or a combination of the two”.

Trump On Trade: On the Trade front, Trump’s policies in­cluded imposing tar­iffs on trading partners like Canada, China, Mexico, and the Eu­ropean Union. His administration said tariffs would benefit American workers, give the U.S. leverage for future trade agree­ments, and protect na­tional security. How­ever, a working paper authored by David Au­tor and others and pub­lished by the National Bureau of Economic Research, shows this did not end up being the case. In fact, re­search published in early 2024 shows that tariffs the former pres­ident put on various goods from China did not increase or de­crease the number of jobs in industries they aimed to, but also led to tariffs from other countries as retaliation that negatively impact­ed American work­ers. The Cato Institute gave Trump a D+. Tar­iffs may be favored by those who see them­selves as “tough nego­tiators” but the costs of import tariffs always get passed on to busi­nesses and consumers and typically are not considered good for the economy.

Biden On Trade: The Center For American Progress published an article in March of last year that evaluated Biden’s trade initia­tives as follows. “Over the past two years, the Biden administration has pursued a number of innovative trade ini­tiatives that in different ways aim to redefine the scope and purpose of U.S. trade relations. These initiatives differ both in structure from traditional free trade agreements (FTAs) and also in their sub­stance, most notably in the emphasis they place on climate aims and worker empow­erment over tariff re­ductions”. The short version of this assess­ment is that the Biden administration has worked to strengthen trade and economic partnerships around the world, including the Indo-Pacific Eco­nomic Framework For Prosperity, the Amer­icas Partnership For Economic Prosperity, the U.S.- Taiwan Ini­tiative On 21st-Cen­tury Trade and the U.S.-EU Trade And Technology Coun­cil. The economics of trade relationships are very nuanced entities and the Biden – Harris administration seems to have taken these complicated factors into consideration as they have crafted both trade and economic policies.

Trump, Biden And The National Debt: According to the Com­mittee For A Respon­sible Federal Budget, a quick analysis of what has happened with the national debt under each President can be broken down as fol­lows.

  • Trump approved $8.4 trillion of new ten-year borrowing during his full term in office, or $4.8 trillion excluding the CARES Act and other COVID re­lief.
  • President Biden, in his first three years and five months in office, approved $4.3 trillion of new ten-year borrow­ing, or $2.2 tril­lion excluding the American Rescue Plan.
  • President Trump approved $8.8 trillion of gross new borrowing and $443 billion of deficit reduc­tion during his full presidential term.
  • President Biden has so far ap­proved $6.2 tril­lion of gross new borrowing and $1.9 trillion of deficit reduction.

National econom­ic policies and global economic conditions overlap from one pres­idential administration to the next. Americans are justifiably con­cerned about the high price of food and oth­er goods. Trump says he’ll deal with inflation as he did before, with tariffs and tax cuts. The Peterson Institution for International Econom­ics warns that middle class Americans will likely face an addition­al $1,700 in costs with his proposed tariffs. Tax cuts may or may not happen as they will be dependent on Congressional approv­al. Kamala Harris has indicated support for increasing corporate taxes, making the su­per wealthy pay their fair share in taxes, continuing to invest in manufacturing, infra­structure and jobs and protecting consumers by enforcing antitrust laws. The question is, which policies will aid in economic recovery and lower inflation? Readers are encour­aged to look beyond media sound bites and election year drama and do their own re­search. Then, VOTE!

The following sources were used for this arti­cle.

Joint Economic Com­mittee: Did Trump Create or Inherit the Strong Economy?

Cato Institute: Grad­ing Trump’s Economic Policies.

Investopedia: The Economic Impact of Donald Trump’s Pres­idency.

Reuters: Trump ends his term like a growing number of Americans.

Forbes: Record-Break­ing Accomplishments On Jobs.

Center For American Progress: The Tax Cuts and Jobs Act Failed To Deliver Promised.

Alliance For Citizen Engagement: Pros And Cons Of The Inflation Reduction Act | ACE.

Center For American Progress: A New Hori­zon in U.S. Trade Pol­icy.

Peterson Institute For International Econom­ics: Why Trump’s tariff proposals would harm.

Committee For A Re­sponsible Federal Bud­get:Trump and Biden: The National Debt.

Rick Evans
Rick Evans
My wife, Marsha Kinzer (a proud DEHS Greyhound, class of ‘77) introduced me to the North Shore on vacation in 2012. It became our regular escape when the stress of our careers in education became overwhelming, and it didn’t take me long to fall in love with the breathtaking scenery, the nice people, and “salad” containing Jell-o and marshmallows. So you can either blame or thank my loving wife for my being here, because when we needed to choose a retirement hometown, Marsha advocated hard for her beloved Duluth, and here we are, six months later. Yes, this will be my first northern Minnesota winter. Yes, I welcome thoughts and prayers. Government, public policy, and social justice weighed heavily in the curriculums I taught at the high school level over a thirty-eight year career. In addition, we were a laboratory school focused on critical thinking in conjunction with technical and scientific writing. So when I found myself adrift on the great ocean of retirement and spied a raft, I jumped at the chance to take up what I’d left behind…minus the bad teachers’ lounge coffee. My position at the NSJ allows me to combine my passions for government and writing, and it’s helping me to feel less out of touch in new surroundings. When I’m not being “Cubby” (Marsha’s favorite new nickname for this green reporter) I enjoy pointing at eagles and saying, “Look, honey. There’s an eagle.” I’ve had an active side hustle as a professional musician for almost as many years as Charlie Parr. As a guitarist/singer/songwriter, I graced the stages of clubs and festivals around southern Wisconsin, including an appearance on A Prairie Home Companion. Should I even mention A Prairie Home Companion, or am I the only one here old enough to remember what that is? Look! An eagle!
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