The Democratic party has a knack for claiming credit where it isn't due and deflecting blame where it is. A recent Time article, "Don’t Give Trump Credit for the success of the Biden Economy," perfectly illustrates this point. Ironically, no one, including President-elect Trump, desires credit for Biden's struggling economy, a key factor in the Democrats' recent election loss.
Time's article seems to be setting the stage for Democrats to take credit for what they anticipate as an economic turnaround under Trump. This isn't the first time they've tried this tactic. Back in 2017, Trump inherited a sluggish economy burdened by excessive government intervention. His immediate actions included tax cuts, deregulation, and promoting domestic energy production. These policies, a stark contrast to Obama's previous eight years, revitalized business confidence and fueled economic growth.
President-elect Trump addresses supporters during an election night event on Nov. 6, 2024, in West Palm Beach, Florida. (Chip Somodevilla/Getty Images)
In just three years, the U.S. economy transformed from stagnant to flourishing. This shift was a direct result of Trump reversing Obama's restrictive policies and embracing free-market principles. Despite this, Obama still attempted to claim credit for the economic success.
Now, history seems to be repeating itself. Let's analyze the current economic reality and its underlying causes.
A major concern is the unprecedented federal debt and deficit. While both have been rising for years, pandemic-era spending exacerbated the problem. Initially, this spending was bipartisan, with Republicans viewing the pandemic as a national crisis demanding federal intervention. However, they expected a return to fiscal responsibility once the crisis subsided, similar to post-World War II. They didn't foresee sustained crisis-level spending beyond the pandemic's end.
Unfortunately, with Democrats gaining control of the presidency, House, and Senate in 2021, the pandemic became a vehicle for advancing their progressive agenda, leading to trillions more in spending.
Four years later, Biden leaves behind an economy saddled with over $36 trillion in debt and a $1.8 trillion annual deficit. Furthermore, the debt has recently surged by another $1 trillion in just over 100 days. This fiscal irresponsibility has tangible consequences, particularly for working- and middle-class Americans.
With inflation exceeding 20% since Biden took office, real wages have fallen by 2.2%. Consumers are feeling the pinch, as real wages dictate their purchasing power. Inflation-adjusted retail sales have stagnated over the past three years. Household debt has ballooned to a record $18 trillion, with mortgages, car loans, and credit card debt all reaching historic highs. Delinquency rates on credit cards and car loans, along with corporate bankruptcies, are at levels not seen since the Great Recession. This is the reality of the "success of the Biden economy."
Worryingly, Biden has no clear plan to address these economic woes. The typical Democratic approach of raising taxes while continuing unrestrained spending is not a viable solution.
Increasing tax revenue doesn't require increasing tax rates. In fact, significantly raising rates can hinder economic growth, ultimately reducing tax revenue. Under the current Trump tax cuts, tax revenue reached record highs, exceeding $4 trillion annually during the Biden administration and nearing $5 trillion in 2022 and 2024. The issue isn't revenue generation, but rather spending control.
The 2024 government expenditure of $6.75 trillion highlights the spending problem. The focus should be on significantly reducing spending while simultaneously boosting tax revenue through economic growth.
To achieve this, Trump will reverse Biden's economic policies, just as he did with Obama's. He'll maintain the existing low tax rates and strategically reduce them further to stimulate economic growth, a strategy that proved successful for Presidents Kennedy, Reagan, and Trump in his first term.
Trump will also dismantle Biden's regulatory burdens to foster economic growth and domestic energy production, reducing government overreach and lowering energy costs. He'll utilize tariffs strategically to bolster national security, enhance the competitiveness of U.S. businesses, and bring jobs back to America.
Furthermore, Trump's Department of Government Efficiency, led by Elon Musk and Vivek Ramaswamy, will focus on significantly reducing the size and cost of government. This team is exceptionally well-suited for this task.
A Biden, Harris, or any other Democratic administration is unlikely to pursue such a pragmatic and effective approach. When President Trump successfully revives the economy, Biden and his Democratic allies will deserve no credit and, ideally, will be held accountable for their economic mismanagement.
