- Under Obama the economy was sluggish and unemployment was up.
- Under Trump the economy has expanded and improved.
- The economy would likely fair better under Trump's policies than Biden's.
Joe Biden, whose campaign has been marked by repeated criticisms of the Trump administration, recently took a jab at the President’s handling of the economy. During a September town hall, Biden argued that Trump is becoming “more erratic” in dealing with the economy. The presidential hopeful claimed “the president is feeling pressure on the economy…He inherited a pretty good economy from Barack Obama, just like he inherited everything in his life.”
Taking a moment to focus on the latter part of Biden’s statement, claiming that Trump “inherited a good economy,” there are some important figures to note. In 2016, the final year of Obama’s presidency, the country’s GDP grew 1.6%. In 2006 GDP growth was at 2.9%, and in 2018 GDP growth again grew to 2.9%. In 2016 unemployment was at 4.7%. In 2006 unemployment was 4.4%, and in 2018 unemployment stood at 3.9%. Using these two indicators of economic health, it becomes quite apparent that Trump did not inherit a relatively good economy from Obama. During the Trump administration unemployment has decreased, GDP growth has increased, and the stock market has flourished.
Biden also claimed that the economy was teetering on the edge of a recession and disapproved of the Trump administration’s actions in light of that. According to a recent Wall Street Journal article, Biden may be correct about an oncoming recession. However, it’s more or less impossible for a President to prevent a recession. The best thing a President can do when faced with an economic crisis is to stimulate the economy by cutting taxes, deregulating business, and protecting domestic industry, three things President Trump has been adamant about doing. When a President tries to completely prevent an economic crisis, such as when Nixon imposed wage and price controls, it ends disastrously.
Biden’s economic plan would increase taxes, including nearly doubling the long-term capital gains tax. This could slow the economy and decrease investment incentives. Biden claims that his tax increases will only effect the very wealthy, as his increase in the capital gains tax would only apply to those making over one million dollars. Although this sounds beneficial to middle America, it could seriously stifle economic growth and hurt the economy overall. When you decrease the incentive for wealthy individuals to invest in the economy, jobs, stocks, trade, wages, and infrastructure all suffer. The reason for Biden’s proposed capital gains tax hike is to increase revenue for the government. However, when the capital gains tax was increased from 20% to 28% in 1986, revenue from the capital gains tax decreased from $44 billion a year to $27 billion a year by 1991.
Trump’s economic policy has improved the economy and has paved the way for economic growth and investment. Regardless of whether or not a recession is on the horizon, incentivizing investment and growth in the economy is sound and historically justified.