Bidenomics
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The Editorial Board at WSJ
President Biden claims that he inherited the worst economy since the Great Depression, but this isn’t close to true. The economy in January 2021 was fast recovering from the pandemic as vaccines rolled out and state lockdowns eased. GDP grew 34.8% in the third quarter of 2020, 4.2% in the fourth, and 5.2% in the first quarter of 2021. By the end of that first quarter, real GDP had returned to its pre-pandemic high. All Mr. Biden had to do was let the recovery unfold.
Instead, Democrats in March 2021 used Covid relief as a pretext to pass $1.9 trillion in new spending. This was more than double Barack Obama’s 2009 spending bonanza. State and local governments were the biggest beneficiaries, receiving $350 billion in direct aid, $122 billion for K-12 schools and $30 billion for mass transit. Insolvent union pension funds received a $86 billion rescue.
The rest was mostly transfer payments to individuals, including a five-month extension of enhanced unemployment benefits, a $3,600 fully refundable child tax credit, $1,400 stimulus payments per person, sweetened Affordable Care Act subsidies, an increased earned income tax credit including for folks who didn’t work, housing subsidies and so much more.
In November 2021, Congress passed a $1 trillion bill full of green pork and more money for states. Then came the $280 billion Chips Act and Mr. Biden’s Green New Deal—aka the Inflation Reduction Act—which Goldman Sachs estimates will cost $1.2 trillion over a decade. Such heaps of government spending have distorted private investment.
While investment in new factories has grown, spending on research and development and new equipment has slowed. Overall private fixed investment has grown at roughly half the rate under Mr. Biden as it did under Mr. Trump. Manufacturing output remains lower than before the pandemic.
Magnifying market misallocations, the Administration conditioned subsidies on businesses advancing its priorities such as paying union-level wages and providing child care to workers. It also boosted food stamps, expanded eligibility for ObamaCare subsidies and waved away hundreds of billions of dollars in student debt. The result: $5.8 trillion in deficits during Mr. Biden’s first three years—about twice as much as during Donald Trump’s—and the highest inflation in four decades.
Ms. Harris boasts that the economy has added nearly 16 million jobs during the Biden Presidency—compared to about 6.4 million during Mr. Trump’s first three years. But most of these “new” jobs are backfilling losses from the pandemic lockdowns. The U.S. has fewer jobs than it was on track to add before the pandemic.
What’s more, all the Biden-Harris spending has yielded little economic bang for the taxpayer buck. Washington has borrowed more than $400,000 for every additional job added under Mr. Biden compared to Mr. Trump’s first three years. Most new jobs are concentrated in government, healthcare and social assistance—60% of new jobs in the last year.
The economy is still expanding, but business investment has slowed. And although the affluent are doing relatively well because of buoyant asset prices, surveys show that most Americans feel financially insecure. Thus another political paradox of the Biden-Harris years: Socioeconomic disparities have increased.
Ms. Harris is promising the same economic policies with a shinier countenance. Don’t expect better results.
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The U.S. economy grew faster than initially thought in the second quarter amid strong consumer spending, while corporate profits rebounded, which should help to sustain the expansion.
Gross domestic product increased at a 3.0% annualized rate last quarter, the Commerce Department's Bureau of Economic Analysis said in its second estimate of second-quarter GDP on Thursday. That was an upward revision from the 2.8% rate reported last month.
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401(k) and IRA millionaires club rapidly expanded:
https://www.washingtonpost.com/business/2024/08/30/401k-millionaires-secret/
The number of 401(k) accounts with $1 million or more increased 31 percent, to 497,000 in the second quarter compared with the same period a year earlier, according to Fidelity Investments, one of the largest administrators of workplace retirement plans. The number of IRA millionaires hit a record 398,594, up 14 percent.
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Inflation.
Did you know that less than $800/month in the Weimar Republic would buy you a multi-bedroom apartment, a live-in butler/cook, all other living expenses and a full-time mistress? OTOH, you couldn't even pay the apartment rent with a wheelbarrow load of marks.
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https://www.foxbusiness.com/economy/cpi-inflation-august-2024
The Labor Department on Wednesday said the consumer price index (CPI) — a broad measure of how much everyday goods like gasoline, groceries and rent cost — rose 0.2% in August from the prior month, in line with the expectations of economists polled by LSEG.
Prices climbed 2.5% in August from the same time last year, slightly less than LSEG estimates and down from 2.9% in July.
Overall, the report indicates that inflationary pressures in the U.S. economy are continuing to ease, though prices remain above the Federal Reserve's 2% target.
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Another quarter of solid economic growth.
https://www.axios.com/2024/10/30/gdp-report-q3-release-economy-inflation
U.S. economy grew at 2.8% rate in the third quarter
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King cotton, baby!
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"Now look here, you Baltic gas passer... " - Mik, 6/14/08
The saying, "Lite is just one damn thing after another," is a gross understatement. The damn things overlap.
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If there's one thing the Harris campaign has taught us all, in this precious learning moment, it's that jokes don't exist, and humor is deeply unsettling. So, I really don't know if anybody is trying to make "jokes" in this "forum", but if you are, I suggest you stop. Our democracy is on the brink. I, for one, am not laughing.
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Among [millennials with 401(k) accounts], the number of 401(k) accounts with a balance of $1 million or more rose to about 10,000 as of Sept. 30, up from around 2,000 in the third quarter of 2023, according to Fidelity, ...
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Always remember, Operation Valkyrie was an act of sedition.
Warning: I post things that interest me. Read and comment at your own discretion. -
@Jolly said in Bidenomics:
Yep, income inequality, as the poor get poorer.
I assume you know that income inequality in democracies is the harbinger of revolution and/or a descending into dictatorship?
That’s not actually the case. It didn’t really come at the expense of the poor. It was mostly stock market driven and the market is thriving because of the number of the middle class moving into the upper class, not the number moving downward.
And again, trying to relate it to populist revolutions in the past is a little ridiculous. The “poor” are generally in housing with hvac, have access to transportation, often own a vehicle, have 1-2 televisions, a computer, and aren’t in danger of starvation. That’s not to say that it doesn’t suck. Speaking from experience, it sucks tremendously, and can be extraordinarily hard to break out of those things keeping you down. But what is keeping them down are personal decisions as much as external factors. Chemical dependencies, single parenthood, hand outs vs hand ups, and an education system that sells them a lie that the choices are a college degree that they can never afford or achieve or living a life in poverty.
You want to limit poverty? Limit the handouts. They can have Pell grants (in fact, increase the number of them), but the first two years HAVE to be at a Community College or Trade School. Have the school systems and counselors really promote what a trade can mean instead of a college degree. Show these kids that there are opportunities that are achievable. Also, go back to promoting family values in the schools and in entertainment.
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@Jolly said in Bidenomics:
as the poor get poorer.
The poor have not gotten poorer. Actual inflation-adjusted income over the last 20 years in the bottom quartile has risen about 17%.
It's not a zero-sum thing - someone should tell that to (three-house owning) Bernie (P)Sanders.
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98% of the population was poor in the French Revolution. Today, it’s 27-29% in the US depending on your sources. In France, it was only 2% that belonged to the wealthy. In the US today, it’s 21-24%. And again, the definition of poor is vastly different. @Jolly knows all of this and has stated as such before. I think he’s just not wanting to find anything positive until January 20th.
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Always remember, Operation Valkyrie was an act of sedition.
Warning: I post things that interest me. Read and comment at your own discretion. -
@Jolly said in Bidenomics:
Ok, for all of those luxuries the poor enjoy, how much is paid for with borrowed money?
For the poor? None. It’s called being poor. They generally don’t get credit cards…
Me/rry/Christmas
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@LuFins-Dad said in Bidenomics:
@Jolly said in Bidenomics:
Ok, for all of those luxuries the poor enjoy, how much is paid for with borrowed money?
For the poor? None. It’s called being poor. They generally don’t get credit cards…
That money comes from Uncle Sam. Last time I looked, Uncle Sam sure did borrow a lot of money...
