Closing Argument
On the Economy
The Biden Administration is doing a good job, and the Democrats have passed a lot of important legislation, such as the infrastructure package and the recent Inflation Reduction Act, to put the nation on the right track for future economic growth and prosperity while reducing the reliance on fossil fuels use that imperils our very existence. Meanwhile many in the GOP under the mesmerizing spell of Trump have gotten ever more lost in the dangerous pipe dreams and racism of right-wing extremism.
The Inflation Reduction Act was split between half devoted to reducing the federal budget deficit and half devoted to reducing climate change and beefing up domestic energy production. https://www.whitehouse.gov/briefing-room/statements-releases/2022/08/19/fact-sheet-the-inflation-reduction-act-supports-workers-and-families/ The Infrastructure Act of 2022 addressed the nation’s deteriorating infrastructure and the transition to a cleaner energy future. https://www.whitehouse.gov/bipartisan-infrastructure-law/
First, the economy. We have been growing quite fast. In 2021, we had the fastest growth since 1984. https://www.cepal.org/en/notes/united-states-economic-outlook-2021-year-review-and-first-quarter-2022 In 2022 In 2022 we experienced slight contractions in the first two quarters and then solid and hopefully sustainable growth of 2.6% in the third quarter. https://tradingeconomics.com/united-states/gdp-growth
The US (and the world) experienced major inflation in 2021-2 – about 8-10% in many developed economies. https://www.forbes.com/advisor/personal-finance/inflation-by-country/ The three causes were and are: the Russian invasion of Ukraine and its resultant global impacts on energy and food prices; the supply chain disruption and resulting shortages due to the Covid pandemic and the trade war between the US and China; and a severe shortage of workers as fast economic growth outpaced the changing nature of work and the workforce due to the pandemic. https://www.forbes.com/advisor/personal-finance/inflation-by-country/ The Federal Reserve has slammed on the brakes with hefty rate hikes as have the Central Banks in nearly every other developed country. https://www.reuters.com/business/finance/central-banks-ease-off-rate-hike-push-october-2022-11-02/ The concern is that this could tip the US and global economies into a recession.
Unemployment is still low in the US, and new jobs are still being created, and there are still many job openings. The unemployment rate is 3.7%. https://www.bls.gov/news.release/pdf/empsit.pdf Employers have been hiring at a brisk rate, despite the Federal Reserve’s rate hikes. https://apnews.com/article/inflation-business-economy-prices-government-and-politics-42dbebe9d9e3f94a0f51e5b693931e16 There are over 10 million job openings. https://tradingeconomics.com/united-states/job-offers
Over the past year, the Biden Administration cut in half the US budget deficit, which had ballooned due to several years of Covid related spending. https://www.cnbc.com/2022/10/21/us-budget-deficit-cut-in-half-for-biggest-decrease-ever-amid-covid-spending-declines.html
Our trade deficit with other nations has also been falling over the past nine months. https://www.bea.gov/news/2022/us-international-trade-goods-and-services-september-2022
The forecasters see US inflation moderating, economic growth slowing, and unemployment ticking up during 2023 in response to the Federal Reserve’s rate hikes. https://www.stlouisfed.org/publications/regional-economist/2022/aug/gdp-growth-decelerating-inflation-us-economic-outlook We don’t yet know whether the Fed and US policy makers will engineer a soft landing or a sharp recession.
The World Bank warns against developing a range of economic policies that could re-ignite stagflation as in the 70’s. https://www.worldbank.org/en/news/press-release/2022/06/07/stagflation-risk-rises-amid-sharp-slowdown-in-growth-energy-markets “The report highlights the need for decisive global and national policy action to avert the worst consequences of the war in Ukraine for the global economy. This will involve global efforts to limit the harm to those affected by the war, to cushion the blow from surging oil and food prices, to speed up debt relief, and to expand vaccinations in low-income countries. It will also involve vigorous supply responses at the national level while keeping global commodity markets functioning well.”