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Biden Has No Answers on the Economy

President Biden and the Democrats have only two sales pitches when it comes to the economy.  The first is the rose-colored-glasses approach.  The economy is in great shape … record growth … low unemployment … strong consumer spending.  Nothing to worry about.

The second sales pitch is that inflation, empty shelves, and shortage of workers are real, but not the fault of Biden’s policies – but Democrats understand the folks back home are suffering and they are working on the problems.

In terms of the economy is great argument, Biden is taking all the credit.  Actually, how much credit his administration and Democrats in Congress really deserve is debatable. Maybe they do not deserve any credit at all.  Maybe their policies prevented the economy from doing even better.

The most important thing to recall is that the economic downturn was created in Washington because of the Covid Pandemic.  Whether the intentional shutdown was insufficient, just right, or excessive is a moot point.  It was what it was.

However, because the economic downturn was not due to a systemic problem in the economy – and came when the economy was surging without inflation and shortages – every economist predicted that the eventual recovery would be swift.  The economy would come roaring back on its own – as all the businesses and buyers returned to their normal practices.

Nothing Biden and the Democrats did contribute to the recovery.  And even as they try to take credit, they are seemingly unable to show specifically what they did to cause the impressive – even record – growth.  It was baked into the cake.

Democrats point to the stimulus package that they passed and Biden signed as a major contribution to the recovery.  In fact, it poured too much money into an already overheating economy and kicked off inflation.

Gearing up for the final furlongs of the campaign season, Biden is outlining his plans for addressing the economic issues.  He did so in an opinion article he penned (or someone penned) for the Wall Street Journal based on an early announcement by the White House.

Typical of Biden, his “plan” is a promise of something for everyone.  The operative word is “lower.”  Biden’s plan promises to lower – “energy bills,” “prescription drugs and healthcare costs,” “food prices,” “cost of everyday goods,” “cost of childcare and long-term care,” and “cost of housing.” And he will reduce the deficit at the same time.  All of that is in his “plan.”  He might as well have promised to cure cancer and end climate warming.  (Oh .. he already promised that during the campaign.)

Biden claims that he can finance all this by closing tax loopholes on millionaires and billionaires – and that leftwing favorite, increase the tax on corporations.  There is a good argument for closing some of the more egregious loopholes used by the super-rich, but taxing corporations relies on maintaining a very uninformed and gullible citizenry.

Businesses do not PAY taxes but pass the cost along to the consumer who pays the tax.  It is a regressive indirect tax that hits the poorest the hardest.

The pump price for gas is an ideal illustration of the impact of corporate taxes.  The national average price for a gallon of gas is approximately $4.60 – and rising.  In a state like Florida, I pay about $4.40 per gallon.  In California, they are paying more than $6.00 per gallon – more than $8 in Los Angeles.  The difference is mostly attributable to state taxes. 

Most folks seem to understand that when we add a tax on gas, we see the pump price increase.  Why do we fail to understand that when you add taxes to other businesses, the prices go up?

 Because Biden and his Democrat pals in Congress have ignited the flames of inflation with excessive spending, the Federal Reserve is stepping in to slow the economy down by increasing interest rates.  That means everything a person buys “on time” will cost more – housing, cars, and all credit card purchases.

The problem with the Biden economic plan is that it will not work because it is not a real plan – and he probably knows that it will not work.  The entire plan is nothing more than empty campaign-style promises.  But unfortunately for Biden, reality will eventually set in.  Biden & Co. are hoping that they can ride on the promises until after the 2022 midterm elections are over.

All the promises and rosy rhetoric, however, may not be enough to convince the public.  People are not stupid.  They can see through empty promises.  That may be why all this self-praising talk and the fantastical promises are not being well received by the general public.  We can see that in the fact that Biden has record-low favorability ratings (36%) – and why 80 percent of the people believe America is heading in the wrong direction.  Even the once dependable black and brown vote is slipping away.

Biden does not have a real “plan” – just more empty promises. 

So, there ‘tis.

Written by CFP Staff Writer

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