As the presidential race heats up, many voters are wondering which of the two candidates is best suited to run the US economy for the next four years.
While voters continue to express valid concerns about the President Joe Bidenthe ability to serve a second term due to his age, Donald Trump got a break this week after the Supreme Court granted him partial immunity for actions taken during his presidency.
As unpredictable as the outcome of the next presidential election may be, a good predictor can be found in the country’s economic performance during each president’s term in office.
Bidenomics vs. Trumponomics: Who Wore It Best?
Key economic indicators can help understand how presidential decisions shaped the country’s course during the Trump years (2016-2020) and during Biden’s ongoing term, which began in 2020.
Although the two candidates have different views on key policies, some economic indicators have remained stable in both presidencies.
A strong labor market was one of the defining features of both presidencies, barring the disruptions caused by the pandemic. The unemployment rate was around 3.6% in 2019 when Trump took office, and after falling from a pandemic peak of 14.8% during April 2020, it has held steady below 4% for the past two years, hitting a low of 3.4 % during the Biden period. deadline.
Economic growth, as measured by changes in Gross Domestic Product, also maintained a relatively stable course through both administrations between 2.3% and 2.7% on a quarterly basis, excluding the pandemic-led recession and its recovery period.
The unusual months marked by the COVID-19 pandemic present the biggest challenge in comparing the economic performance of the two presidencies. The initial impacts of the pandemic spread during the final months of Trump’s term, while most of the disruptions extended into the Biden presidency, where they eventually unfolded and led to a return to normality.
This fact means that all economic data should be taken with a grain of salt, as Biden inherited a government largely hit by pandemic disruptions, which also means that the extraordinary growth rates seen during 2021 and 2022 cannot be ‘are solely attributable to Bidenomics, but are the result of a predictable post-pandemic rebound.
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Inflation and tariffs: Biden presided over the most inflationary period in decades, with prices rising by at least 20%. In contrast, inflation only reached 5% throughout the Trump era.
However, it would be too quick to assume that Trump would be better at combating today’s struggling inflation than a second Biden term. Many of the causes for the recent inflationary trend can be attributed to external factors, including supply chain shortages and work disruptions from the pandemic, which were later exacerbated by geopolitical events such as the Russian invasion of Ukraine and its impact on global energy prices.
Pandemic-era aid packages also contributed to rising inflation, experts say, but they were passed by both administrations and were mostly legislative efforts, not purely executive measures.
On Tuesday, a Jefferies analyst said a Trump victory would mean “stronger growth and higher inflation,” with the Fed set to hold interest rates higher for a longer period of time.
A key difference in policy decisions for the two presidents comes in how they implemented tariffs on foreign goods. While both are favoring higher tariffs on imports for the future, especially those coming from China, Biden’s strategy is set on protecting specific strategic industries, such as EVs, semiconductors and green energy, Trump favors higher tariffs across the board.
This could affect the country’s recovery from inflation, which remains above the ideal of 2% and reached 3.3% in May, one basis point lower than last month.
A Trump plan to raise tariffs on US imports by 10% and 60% on all imports from China was cited by a Goldman Sachs analyst on Tuesday as a sure way to raise inflation and increase the chances of a tougher trade war with China.
Another key difference between the two leaders comes in their views on how to finance the government by taking on different strategies, from taxes to buying debt. While Trump favored tax cuts and significant government borrowing, Biden has referred to plans to raise corporate taxes. In previous terms, Trump took on roughly twice as much debt as Biden.
The US now runs one of the largest deficits in history, with public debt at roughly 122% of GDP, and both plans are expected to lead to large deficits for years to come, according to Bankrate.
Oscillation States: With most polls putting the outcome at a narrow margin, it may be left to voters in swing states like Michigan, Wisconsin, Georgia, Arizona, Nevada, Pennsylvania and North Carolina to determine the outcome.
A recent CBS poll had voters in swing states reporting that the economy will be a top issue when choosing the next president. Real household incomes have fallen in most of these states since the pandemic, putting pressure on Biden to account for their loss in purchasing power.
Housing prices are another sore point for Biden in swing states. Rents and home prices have skyrocketed since the pandemic in major urban centers across these states, according to data compiled by Reuters.
While the Biden administration took on the monumental task of leading a recovery from the pandemic recession, voters in key states will not necessarily reward his policies when they see that they may be worse off in net terms than when Trump was in office. .
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Image created using artificial intelligence via Midjourney.