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Bidenomics: The Great Gaslight?
Is it possible for President Biden to achieve a Reaganesque moment of economic and political success with his economic plan?
What exactly is Bidenomics? Well, for starters Joe Biden didn’t coin the phrase, it was meant as a pejorative term for his economic policies. Not only has he embraced the term but it has become central to his campaign.
The White House has embraced Bidenomics, a term from which the president himself has distanced in the past. "I did not come up with the name," he claimed Wednesday, adding that he was now "happy" to call it such. This embrace comes as a direct rebuttal to prevailing disapproval of Biden's economic policies; an Associated Press poll from last month showed only 33% of the country backed the president's handling of the economy. Bidenomics is "the word of the day, word of the week, word of the month, word of the year here at the White House," White House spokesperson Olivia Dalton said on Tuesday, ahead of Biden's Chicago speech. Between the president's remarks and the rest of the administration's full-throated backing of the term, it's clear that "Bidenomics" is intended to play a central role in Biden's reelection pitch to voters.
After the 2020 election, President Joe Biden unveiled an ambitious economic agenda as he wrapped himself in Bidenomics. Bidenomics has been marked by several key initiatives, including the American Rescue Plan Act, infrastructure investment plans, and proposed tax reforms. Biden often chides, that Bidenomics is working… but it doesn’t feel like it is working for average Americans.
Rescuing the Economy or Creating a Crippling Inflation
One of the first and most significant pieces of legislation under Biden's economic agenda was the American Rescue Plan Act (ARPA). Passed in March 2021, it aimed to address the immediate economic fallout of the COVID-19 pandemic. ARPA provided controversial direct stimulus payments to Americans, extended unemployment benefits, and allocated funds for vaccine distribution. Proponents argue that these measures helped stabilize the economy and reduce poverty rates during the era of COVID-19. Critics argue that the American Rescue Plan wasted resources and ushered in unprecedented inflation that could have been mitigated.
The Heritage Foundation summarized the effects of the careless federal spending seen during the COVID-19 pandemic in their Special Report released this week, saying:
“The COVID-19 pandemic unleashed unprecedented federal fiscal and monetary actions that wasted trillions of dollars. This reckless and politically opportunistic spending spree has left the U.S. with a weakened economy, an inflation crisis, and a looming debt crisis. The volume and nature of the spending spree helped to create skyrocketing inflation and interest rates and created a labor shortage, reducing real household incomes and leaving store shelves bare and supply chains broken. A looming fiscal crisis has shifted from a long-term concern to a current event.”
Economic Worries Persist: "Bidenomics" Faces Skepticism Among Americans
In the face of economic troubles in the United States, a recent poll by the Suffolk University Sawyer Business School and USA TODAY has shown that many Americans are deeply worried about the economy and are questioning the effectiveness of President Joe Biden's plans for the country’s economy. A lot of Americans, regardless of their political beliefs, are feeling the pressure of rising costs for things like groceries, housing, and gas. It's hitting their wallets hard.
Despite President Biden talking up his economic agenda, most Americans don't share his optimism. In fact, a whopping 79% of people in the poll had negative things to say about the economy. This sharp difference between what Biden says and what people feel is a big challenge for his administration. The poll also shows that only 34% of Americans think President Biden is doing a good job with the economy, while a much bigger 59% are unhappy.
This shows that many people aren't happy with "Bidenomics" and where the economy seems to be heading. With costs going up, lots of Americans are changing how they spend their money. Many are eating out less, buying fewer clothes and groceries, and putting off home improvements. This is a real-life impact of the economic pressures people are facing.
The poll also highlights the inequality in our society. Lower-income families are more likely to cut back on spending compared to those who earn more. This shows how economic disparities are shaping how people see the economy. In short, "Bidenomics" is facing skepticism from a big chunk of the American population because they're worried about the economy. Rising costs, negative feelings, and doubts about the administration's economic plans are all contributing to this unease. President Biden faces a tough task in trying to bridge the gap between his economic vision and the everyday economic struggles of regular Americans.
Bidenomics Versus Reaganomics
There is a natural connection to be made between Bidenomics and Reaganomics. Perhaps, Biden would like to replicate the success that Reagan had with his economic plan. Bidenomics invokes Reaganomics in its approach to addressing economic challenges while emphasizing different priorities. Like Reaganomics, Bidenomics recognizes the importance of government intervention in the economy, but with distinct goals. While Reaganomics focused on tax cuts and deregulation to stimulate economic growth and reduce inflation in the 1980s, Bidenomics is implementing government spending and targeted tax increases to address income inequality, support social programs, and invest in infrastructure. Both approaches acknowledge the role of government policy in shaping economic outcomes, albeit with differing strategies that reflect the unique economic contexts and societal priorities of their respective eras.
Joe Biden and Ronald Reagan served in different eras and faced distinct economic challenges. Here’s a brief comparison of the two plans:
Reaganomics was implemented during a period of high inflation and high tax rates. The main focus was on reducing inflation and promoting economic growth. Whereas, Bidenomics has been implemented in the aftermath of the global financial crisis and during the COVID-19 pandemic. The main goals include economic recovery, infrastructure investment, and addressing income inequality.
Reaganomics involved significant tax cuts, including a reduction in the top marginal tax rate, with the idea that lower taxes would stimulate investment and economic growth. Biden has proposed raising taxes on high-income earners and corporations to fund social programs and infrastructure investments. The aim is to address wealth inequality and generate revenue for government initiatives.
While Reagan did cut some domestic programs, there was a significant increase in defense spending during his presidency. Biden's economic agenda includes substantial government spending, particularly on infrastructure, social programs, and climate-related initiatives.
Reaganomics aimed to stimulate economic growth, reduce inflation, and create jobs through a focus on supply-side economics and deregulation. Bidenomics seeks to address economic inequality, provide support to lower- and middle-income families, and invest in infrastructure to create jobs.
Initially, Reaganomics faced high inflation, but over time, inflation rates decreased. Interest rates were high during his early years but eventually declined. The impact of Bidenomics on inflation and interest rates remains a subject of debate. In the early years of the Biden administration, there were concerns about rising inflation.
It is credited with promoting economic growth and creating jobs but is also criticized for increasing income inequality. Its impact is still unfolding, but it has contributed to strong GDP growth, job creation, and attempts to address income inequality.
In this era of economic policy debates, the connection between Reagan and Biden is undeniable. While they led the nation in different times and confronted distinct economic landscapes, the legacies of "Reaganomics" and the emergence of "Bidenomics" reveal the enduring influence of government intervention in shaping economic destinies. Both administrations recognized the pivotal role of policy in molding economic outcomes, even if their goals and strategies differed.
As America grapples with her current challenges, this connection serves as a reminder that the economic philosophies of the past continue to shape the present and future of the nation's financial well-being. In the quest to navigate economic challenges, it remains to be seen whether President Biden can invoke the same level of success that President Reagan achieved with his economic plan, making the path ahead one that may require a measure of both luck and skill. There's no denying that Ronald Reagan was renowned as the "Great Communicator," and President Biden might consider drawing inspiration from Reagan's communication skills to articulate his economic policy more effectively.