The Washington Post published an article earlier this month with title “This is a great economy. Why can’t we celebrate it?” The article starts with the following paragraph.
By just about every measure, the U.S. economy is in good shape. Growth is strong. Unemployment is low. Inflation is back down. More important, many Americans are getting sizable pay raises, and middle-class wealth has surged to record levels. We are living through one of the best economic years of many people’s lifetimes. Yet it’s barely mentioned in popular culture or on the campaign trail.
Why is it hardly mentioned – and widely assumed to not be the case? The author attempts to answer her own question with statement, “Polarization in the United States makes it difficult to talk about any truth, even about the economy.”
Yet the data say the economy is very good. The unemployment rate is down to 4.1 percent. The S&P 500 stock index is up over 20 percent this year. And the Gross National Product (GDP) has been growing at a robust 3 percent pace.
Middle class Americans are more optimistic about their financial future than they were a year ago. Gas prices have been falling, and the economy added a net 254,000 jobs in September–far higher than expectations.
The U.S. economy is so robust it is getting international attention. Last week the Economist magazine came out with a cover story declaring the American economy as the envy of the whole world.
Despite all this good news about the economy under Biden-Harris, a recent AP-NORC national poll showed that most voters think the economy is poor, and they are split on whether Trump or Harris can fix it.
One poll respondent seemed to sum up the feelings of most respondents to the poll.
“It seems to me that in my lifetime, every time a Democrat holds office, the economy suffers,” she said. “Prices go up, taxes go up and the national debt goes up. While I don’t approve of everything Donald Trump says and does, I do believe he is the better choice.”
This may be the situation of people not believing their “lying eyes,” as comedians say. What they recall is not what happened. They saw something but were told to believe something else.
First, the data. The economy has boomed under Biden. During Trump’s first three years (before COVID), the economy created only 6.5 million jobs. During Biden’s first three years (2021-2023), the economy created 14.5 million jobs. After Trump’s last full fiscal year in office, the federal deficit was 14.7% of gross domestic product (GDP) – the biggest shortfall since World War II. In fiscal 2023, under Biden, the budget deficit was 6.2% of GDP.
Apparently, most of the American electorate is unaware of the economy – and history during their lifetimes.
Looking at the average number of jobs created each year of a presidential term, Biden has created more than twice the number of jobs created by any president since and including Jimmy Carter. Perhaps surprising to many citizens, Biden is continuing the record of previous Democratic presidents. Democratic presidents Biden, Clinton, Carter, and Obama created many more jobs per month than any of the four Republican presidents during that period (since Carter).
Let’s look at a broad range of data from a more extended period.
In 2016, two economists showed the same trend in an article in the American Economic Review, one of the nation’s oldest and most respected scholarly journals in economics:
“The U.S. economy has performed better when the president of the United States is a Democrat rather than a Republican, almost regardless of how one measures performance. For many measures, including real GDP growth (our focus), the performance gap is large and significant.”
This past April, the Economic Policy Institute issued a report comparing the economy’s performance during Democratic and Republican presidential administrations. The report showed that the economy performed much better during Democratic administrations than during Republican ones.
Those of us who believe our eyes have a major task: to convince people that Democrats do better with the economy and that their favorite politicians and media sources may be lying to them.
