U.S. President Joe Biden pauses as he delivers remarks on actions to protect voting rights in a speech at National Constitution Center in Philadelphia, Pennsylvania, U.S., July 13, 2021. REUTERS/Leah Millis
Last updated on July 18th, 2023 at 01:43 pm
Perception hasn’t caught up with reality yet, but President Biden and the Democrats are poised to oversee the biggest boom in the US economy in decades.
Robert Shapiro wrote in Washington Monthly:
Over the first three quarters of this year, real GDP increased at a 7.8 percent annual rate—that’s adjusted for the current inflation. The Federal Reserve expects real growth of 5.9 percent for all of 2021, followed by another 3.8 percent increase in 2022. By any recent standard, these are extraordinary gains. From 2000 to 2019, real GDP grew at an average annual rate of 2.2 percent and never reached 3 percent. Investors have noticed: From January 20 to December 7, 2021, the S&P 500 Index jumped 21.7 percent.
Strong growth usually means healthy income gains, and the disposable income of Americans grew 3 percent after inflation over the 10 months from January to October. That far outpaces the gains of only 0.5 percent for the comparable period in 2019 and 1.7 percent in 2018. Wages and salaries comprise nearly all of most households’ incomes, and those earnings also are rising much faster than normal. From January through October, all wage and salary income paid by private businesses increased 2.4 percent after inflation, compared to gains of 0.3 percent for the comparable period in 2019 and 0.7 percent in 2018.
Republicans have a history of taking good economies and turning them bad by repeating one mistake over and over again. When Republicans see a good economy, they immediately move to cut taxes for the wealthy and corporations.
Under George W. Bush, they called this policy helping job creators as they promised that cutting taxes for the rich would cause them to spend more money on job creation.
The job creators took the money and ran.
During the Trump presidency, Republicans tried the same tactic again, as they promised that tax cuts for the wealthy and corporations would lead to higher wages as the wealthiest Americans would generously pass their tax cuts down to their workers.
The rich people and corporations bought back stock and got even wealthier.
Biden and the Democrats are targeting the middle class and below with their tax cuts. Their policies like the CARES Act and infrastructure are intended to fuel the boom by creating more jobs.
The perception of the economy always lags behind the numbers. Inflation is a supply chain issue that should be resolved in a few months. Gas prices have fallen twenty percent in three weeks.
If Biden gets inflation and gas prices under control, the American people will notice, and the midterm election could turn out a lot differently than Republicans expect.
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