Living in a Biden Economy
Former Vice President Joe Biden is ahead of President Trump on almost every metric: handling of the pandemic, overall trustworthiness, race relations, and military support. However, for Pennsylvania voters especially, Biden can’t catch Trump on the economy. Despite POTUS’s failed businesses, fraudulent university, and criminal mishandling of a charity, his polls numbers edge Biden when it comes to Pennsylvanians’ beliefs on which man is better on the economy. However, a report released this week just might change America, and the Commonwealth’s, perspective on this very issue.
On September 23, economists Mark Zandi and Bernard Yaros, of Moody’s Analytics, published a report entitled “The Macroeconomic Consequences: Trump vs. Biden.” The report uses the policies in each candidate’s economic plan to predict what the American economy will look like over the next four years within four possible scenarios: 1) Trump presidency + GOP Congress; 2) Biden presidency + Democratic Congress; 3) Trump presidency + divided Congress; 4) Biden presidency + divided Congress. Overall, the report predicts that Biden’s more robust economic spending plan will result in a stronger economy than that which would occur under Trump’s more austere economic plan. As always, though, the devil’s in the details.
On government spending, Biden’s economic proposal calls for $7.9 trillion to be used for infrastructure, education, clean energy projects, and investments in American-made products. Moody’s predicts that these investments will create jobs, leading to lower unemployment, ultimately stimulating the economy. POTUS’s plans include cutting health care and retirement benefits for federal government employees and slashing social services like the Supplemental Nutrition Assistance Program and Temporary Assistance for Needy Families. The report predicts that health care will take the biggest hit under POTUS’s plan. It appears that the only spending increases in the next Trump term are transportation/infrastructure (~$1 trillion) and military (~$166 billion). Zandi and Yaros do not envision these spending cuts or minimal spending increases to contribute to sustained economic growth.
On education, Biden plans to spend almost $2 trillion dollars over the next decade, including funding universal pre-K, reducing higher education costs for public and community college students, adjusting student loan repayments, and adding Title I funding. These policies would improve employment and cut costs for average Pennsylvanians. By contrast, POTUS has little by way of an education plan and wants to end the Public Service Loan Forgiveness program, which would provide no relief to Pennsylvanians drowning in college debt.
On social programs and health care, Biden’s economic plan includes $1.5 trillion for more comprehensive family leave policies, elder care support, expansion of the ACA, and a public health care option, all of which provide families with additional savings and make it easier for working people to obtain affordable health care coverage. While POTUS’s economic plan includes funding for paid parental leave, the opioids crisis, and mental health, he continues to try to dismantle the ACA; and, as of September 23, he still has not released a specific health care plan.
On taxes, the two candidates are worlds apart. Joe Biden’s economic proposals include tax increases on corporations and wealthy taxpayers. 50% of the anticipated tax revenue in his plan comes from corporations. While individuals may pay a lower income tax under POTUS’s economic plan, Zandi and Yaros note that “households with higher incomes and net worth” are the real beneficiaries.
The report concludes with two key findings. First, the strongest economic result comes from a Biden presidency and a Democratic controlled Congress. Zandi and Yaros predict that Biden’s term will include the creation of almost 20 million jobs and an unemployment rate of 4% by the second half of 2022. Unfortunately, the researchers predict a weak economy under a Trump presidency and a Republican controlled Congress. In that scenario, the economy is expected to create only 11.2 million jobs, and 2024 is the soonest we can expect solid employment recovery. Second, and most important, is that working families are the real winners of Biden’s economic plan. Not only will their taxes remain constant, but they also stand to gain the most from Biden’s direct infusion of money into education, housing, health care, infrastructure, and green energy. Contrary to all GOP’s scare tactics and fear-mongering, it turns out that a bigger, more robust economy — under the leadership of Joe Biden, Kamala Harris, and a fully Democratic Congress — will be a major boon for the middle and working classes Americans.
