Joe Biden speaks at an electrical equipment manufacturer in Milwaukee, Wisconsin in August. Photographer: Scott Olson/Getty Images via Bloomberg
The economy under President Biden has faced significant challenges, specifically with inflation, unemployment, and poverty. President Biden has aimed to improve these critical aspects of an economy through various policy measures, each with varying degrees of success and controversy.
Inflation is when the average price of goods increases over time, making everyday goods more expensive for the average consumer. President Biden has aimed to address inflation, which reached a high of 9%, with the Inflation Reduction Act (IRA). The Act, however, has been criticized by economists for not reaching its goal. Although inflation saw a fall from 9% to a healthy 3.2%, many economists agree that it was not due to the Act. Republican legislators also argue that the act would worsen inflation, as it injects more money into the economy into areas such as climate reform and energy. Nevertheless, neither of these things happened. Although not the success the Biden administration had hoped it would be, the Act certainly did not worsen inflation. While the Act held potential for long-term cost reduction, its immediate impact on overall inflation has been limited.
Unemployment, or the percentage of the total workforce that is seeking a job but cannot acquire one, is another important factor of the economy. Following the layoffs during the Covid-19 pandemic, President Biden was faced with a large unemployment problem. To solve this, Biden introduced the American Rescue Plan, which provided stimulus payments, extended unemployment benefits, and made significant investments into infrastructure. The immediate effect of this policy was a drop in unemployment from 6.1% at the time of passage to 3.4% at the beginning of 2023. However, the plan has been expensive and funds are running out. Many have criticized the plan as too expensive and increasing inflationary pressures. Furthermore, the extended benefits have been criticized for potentially discouraging some from returning to work, and the job creation focus on infrastructure may not address the skills gap in the labor market. Nonetheless, the ARP achieved historic job growth, recouping all of the jobs lost during Covid and an additional 5.5 million.
Poverty is when an individual does not have the financial resources to achieve an adequate standard of living. For President Biden, addressing high poverty is a primary issue. Poverty reduction efforts have included an expanded Child Tax Credit and increasing funding for food assistance programs like SNAP. According to White House reports, over 60 million children received the expanded CTC. These measures have provided immediate financial relief and improved access to nutritious food, lifting millions of children out of the poverty cycle. However, the expensive and temporary nature of these programs makes it unsustainable in the long-term. A responsible government cannot responsibly sustain high expenditure because of the risk inducing upwards inflationary pressure.
While President Biden’s economic policies have made strides in addressing inflation, unemployment, and poverty, they also face significant challenges. The effectiveness of these measures has varied, and their long-term sustainability remains uncertain. Many Americans are still struggling with high prices for groceries, gas, and electricity, and there is widespread skepticism about Biden’s ability to lead a strong economy. As the 2024 presidential election approaches, Biden’s economic track record is likely to be a major talking point. Voters discontent with the current economic situation may turn to alternatives, such as former President Trump. For Biden, finding the right balance between immediate relief and long-term growth is crucial for economic success.
Bibliography:
Boak, Josh, and Paul Wiseman. “Yes, inflation is down. No, the Inflation Reduction Act doesn't deserve the credit.” AP News, 13 August 2023, https://apnews.com/article/biden-inflation-reduction-climate-anniversary-9950f7e814ac71e89eee3f452ab17f71. Accessed 27 June 2024.
Higgins, Trevor, and Sally Hardin. “The Inflation Reduction Act Will Save Families Thousands of Dollars.” Center for American Progress, 12 September 2022, https://www.americanprogress.org/article/the-inflation-reduction-act-will-save-families-thousands-of-dollars/. Accessed 27 June 2024.
Picchi, Aimee, and Alain Sherter. “Biden budget would cut taxes for millions and restore breaks for families. Here's what to know.” CBS News, 12 March 2024, https://www.cbsnews.com/news/biden-budget-tax-child-tax-credit-ctc-eitc-who-qualifies/. Accessed 27 June 2024.
Sasso, Michael, and Christian Hall. “Bidenomics: President Biden’s Economic Philosophy, Explained.” Bloomberg, 11 January 2024, https://www.bloomberg.com/news/articles/2024-01-11/bidenomics-president-biden-s-economic-philosophy-explained. Accessed 27 June 2024.
The White House. “The Child Tax Credit.” The White House, https://www.whitehouse.gov/child-tax-credit/. Accessed 27 June 2024.
Comments