Bidenomics Myths
As the election of 2024 draws near, the news media is full of stories about President Biden’s economic successes and about the benefits of what he calls Bidenomics. Well, it seems that along with his talk about his success, there is talk about Bidenomics myths. What are these Bidenomics myths?
Not a day can go by without the public being exposed to President Biden or a campaign ads being seen on television making claims about the benefits of his economic policies. He claims that his signing into law of his Inflation Reduction Act has been the defining economic moment of his presidency. But at the same time, Biden himself has admitted that the law has nothing to do with inflation. So, what are the key points of the act? Biden breaks down the Inflation Reduction Act into delivering six main benefits to the American people. Those are: lowering costs for families, increasing energy security, restoring fairness in the tax code, creating jobs, cutting the deficit, and addressing the climate crisis. Let’s look at these six so-called benefits.
The first claim being made is that Bidenomics has lowered the costs for American families. Well, inflation has already added about $10,000 dollars of added costs per year to an average families budget. This has placed a huge financial strain on both working lower and middle class families. They are struggling to make ends meet. Yes, the inflation rate has dropped from its high of 9.1% last year, but according to the Bureau of Labor Statistics the dollar has lost 16% of its purchasing power. This means that families struggle just to buy what they did last year, let alone buy additional items or services. At the same time, recent polls show that six in ten Americans believe that their lives are worse off today than it was 50 years ago. The claim Biden makes about restoring the American Dream is just a mirage to most.
The still present high prices from last year’s rise in inflation is forcing American families to choose between retirement savings and paying today’s bills. Forget about purchasing a new home with interest rates above 7.5%. It seems that most prominent financial institutions are predicting a recession before the end of Biden’s first term.
President Biden’s second claim is that he increased this country’s energy security. It’s hard to believe that America is more secure about energy when the first thing Biden did was block pipelines, cancel drilling leases and add more regulations on oil companies that make attempting to drill a new well almost impossible. He focuses on the $7,500 tax credit for purchasing an electric vehicle as one of the most significant benefits of his plan. The average American has a tough time justifying the purchase of a $70,000 EV with or without the tax credit. It seems the only people benefitting from Biden’s energy policies are the wealthy.
What’s even worse, is that the Inflation Reduction Act funnels hundreds of billions of dollars into green energy companies while at the same time imposing new fees and regulations on the fossil fuel industry that is having the effect of killing off high paying fossil fuel energy jobs while raising energy costs for already struggling families.
President Biden’s third point is his “taking on special interests and winning”. Well, it seems that the Inflation Reduction Act does just the opposite. It gives massive subsidies to the least taxed corporations, the green energy companies. Biden talks about the benefits his law brings to the small startup green energy companies, but once the money is tracked, it turns out it’s the largest corporations receiving 90% of the benefits of this law. And as to somehow make it seem that this law would have teeth, it included a provision to add 87,000 new IRS auditors. Oh, these auditors would only look at citizens making over $400,000 dollars, but it only took a few months for the head of the IRS to admit that this limit would change after a few years.
The fourth point Biden makes about his Bidenomics plan is that it has created more jobs in two years than any administration has done in a single four year term. What Biden neglects to mention is that over 70 percent of these so-called new jobs are jobs that were just recovering from the pandemic. Additionally, he claims that the Inflation Reduction Act has created manufacturing jobs. Yet, the National Association of Manufacturers estimates that 29,000 jobs will be lost.
Biden’s next point is that this law, along with reducing inflation because of lowering drug costs, will lower the deficit and even produce a fiscal surplus within a decade. What is not being mentioned is that the law’s green energy tax credits are coming in way over the laws projections. It was estimated at the time this law was passed that the energy tax credit would cost about $650 billion dollars, but now the estimates have risen to around $1.2 trillion. This law will actually increase the national debt, not lower it.
And lastly, President Biden claims that the Inflation Reduction Act will combat the threat of climate change. This claim is mostly correct. If the reductions this act claims to achieve come true, then it will be the one major success of this law. But what is not being talked about is the fact that China’s emissions, along with most other Asian nations, continues to skyrocket, which will negate the effects our efforts will have on reducing climate change. So, while these new regulations work to change the impact of climate change, it also has the side effect of seeing American jobs continue to move overseas, thereby killing more good paying jobs. As American jobs continue their move overseas, it weakens this country’s supply chains, making us more reliant on others for our security and economy.