Is Biden Misleading America on Economic Growth?

Is Biden Misleading America on Economic Growth?

( – All politicians are opportunists. Yet, not all politicians are irresponsible trigger-happy opportunists. President Joe Biden is more of the latter. Over the last 40 years, his words always managed to get him into trouble. Now, he’s getting ahead of himself once again. What could follow is a path of destruction for the US economy and the Democratic Party.

On Thursday, January 27, Biden took to the airwaves to declare he was the most successful president of all time. In all seriousness, the president said that he’s personally responsible for overseeing the fastest economic growth since 1984. To throw his words back at him, what a bunch of malarkey. He left a lot out in his speech, but that’s par for the course with this administration.

Biden Tells Incomplete Story

The president is desperate for a victory of any kind. On the economy, voters are beating him up badly in the polls. On Thursday, the government announced that the economy grew 5.7% in 2021. Biden declared it was the first time the US economy grew faster than China’s over the last 20 years. He added that the growth wasn’t an accident, and claimed his policies were the reason for the economic success.

So, the two things Biden cited are true. It is the fastest economic growth since 1984, and it’s the first time US economic growth was higher than China’s since 2002. However, he’s missing an enormous amount of context.

For one, the economic growth appears massive because the US economy completely shut down for much of 2020. It’s not hard to grow the economy year-over-year when the previous year is around 1% economic growth. The economy’s growth was certain to rebound strongly as consumers, plush with taxpayer dollars and government debt funds, decided it was time to spend it. It wouldn’t have mattered who occupied the Oval Office.

So, did the growth occur because of Biden, or despite him?

Did Biden Speak Too Soon?

Before Biden starts taking credit for the economy, having a little discipline might be good. He may have just created another self-inflicted error. What the president didn’t say was that his war on energy sparked the impending gasoline crisis as prices are heading towards $4 per gallon or more in some locations by this summer. He didn’t mention that inflation is skyrocketing and gobbling into the increased wage gains made in 2021 as employers increased pay to lure people to work.

It’s the most perfect self-created storm in US history.

Now, concerns are mounting that as the Federal Reserve increases interest rates to slow inflation, it could tip the country into a significant recession. The Fed knows this, but there are few options on the table, and they have to decide between the lesser of two (or more) evils.

On Thursday, retail expert Burt Flickinger said the signs of recession are mounting as retail stores are bleeding an enormous amount of money. He said the profit on a $50 item is only $1. Those kinds of margins are unsustainable. To compensate, retailers will raise their prices to afford higher salaries, the rising cost of wholesale goods, and increased operational costs for things such as utilities.

Remember, former Clinton and Obama economic officials warned inflation would spike if Democrats acted alone to pass the American Rescue Act in March 2021. The Democrats blew them off. Now, Biden wrongly states the only way to end inflation is to pass his multi-trillion-dollar socialist Build Back Better proposal that failed in the Senate in December.

Let’s hope that Biden is right that this is the best economy in 40 years. Unfortunately, all the indicators suggest he is not. If 2022 turns out to be as bad as some economists suggest, Republicans will use Biden’s words against Democrats in the 2022 midterm elections. Voters are already on edge, and polls suggest Democrats may face a “shellacking” in November.

Sometimes, saying nothing is better than saying something when all the facts don’t align with the narrative. For Biden, it’s too late now. The words are out of the bag.

Don Purdum, Independent Political Analyst

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