President Biden took the opportunity on Tuesday to boast about the data. “In a world where inflation is rising in double digits in many of the world’s major economies, inflation is falling in America.” He claimed that this is proof that “our economic plan is working”.
Biden also highlighted the 10.5 million jobs added during his presidency, including 750,000 in manufacturing. And he laid out his goals for the economy, which now seem real. reduce inflation while keeping our labor market flexible; building an economy from the bottom up and from the middle.”
Republicans may prefer to credit the Federal Reserve rather than Biden for easing inflation. Or they might say that the economy is always going to stabilize when supply and demand return to normal. But that’s not the story they’ve been telling for over a year. According to GOP gospel, that pandemic spending was wrong and Biden was driving the US economy into recession. Oh, and according to Republicans, Biden was somehow to blame for skyrocketing gas prices.
So, which is correct? Is Biden responsible for the economy or not? A more honest and accurate explanation would be that Biden’s spending packages (such as infrastructure investment, semiconductor manufacturing, and green energy) were not as inflationary as Republicans claimed, and that Biden’s support for an independent Federal Reserve, including Jerome H. Transforming Powell’s candidacy. his chair, helped curb prices. Meanwhile, gas prices are simply a function of the global market, and fortunately they are falling as the global economy slows.
Alas, Republicans are not taking such a measured approach these days. They prefer to speak in apocalyptic terms and create a false picture of the economy. (Everything was fine under Donald Trump.)
If the economy continues to improve, the GOP will run out of ideas for its agenda. It could go back to advocating tax cuts for the rich, but that would be inflationary. That could hit some of Biden’s legislative accomplishments, such as caps on prescription drug prices, but they are popular. It can secure more drilling permits, but oil companies don’t take advantage of the public leases already available to them.
Meanwhile, if the economy continues on this trajectory, any concerns among Democrats about a second term for Biden could disappear. It may even dissuade some Republican alternatives to running for Trump. A relatively young candidate like Florida Gov. Ron DeSantis may not want to endure an uphill primary battle with Trump only to face a president with a strong economy.
For now, Biden and his fellow Democrats can breathe a sigh of relief. Inflation is still high, but the outlook for 2023 looks sunnier than it has in some time.