Turn the clock back a year. President Joe Biden, just weeks after taking office, was pitching his American Rescue Plan, saying that “It’s big, and it’s bold. And it’s a real answer to the crisis we’re in.”
Biden promised that the $2 trillion spending spree would “generate more growth, higher incomes, a stronger economy, and our nation’s finances will be in a stronger position.” We’d be at “full employment by the beginning of next year.”
Well, here it is. Next year. And nothing Biden promised has come to pass. By most measures, in fact, we’re worse off than we were before Biden “rescued” us.
The economy is growing more slowly than expected. Incomes are being eaten up by rising inflation. Optimism is below where it was during the height of the pandemic in 2020. The nation’s finances are in far worse shape, with the national debt up $1.8 trillion since Biden took office. We’re still nearly 3 million jobs shy of the previous peak. Oh, and COVID deaths under Biden now top 430,000 – more deaths than happened while Donald Trump was president.
Let’s go through some of the specifics of how we’re worse off than a year ago.
Inflation is up. The year-over-year inflation rate in January was 7.5%. A year ago it was 1.4%. For the second half of 2021, prices jumped 6%, a rate higher than any year since Jimmy Carter’s stagflation gripped the nation.
This is definitely making people worse off than last year. An analysis by Moody’s Analytics – the same outfit that praised Biden’s rescue plan a year ago – finds that inflation is costing households an average of $250 a month.
“A lot of people are hurting because of high inflation,” Moody senior economist Ryan Sweet told the Wall Street Journal. “$250 a month – that’s a big burden. It really hammers home the point of ‘what is the cost of inflation?’”
Wages and disposable income are down. Biden keeps claiming that wages are climbing. And they are. But inflation is climbing faster. As a result, after adjusting for the rapid rise in prices, average weekly wages are down 3% from a year ago.
So is disposable income. Data from the Bureau of Economic Analysis show that real household disposable income was lower in December 2021 than it was at the start of the year, and back down to where it was in November 2020.
The Misery Index is up. When Biden took office, the Misery Index – which simply adds the unemployment and inflation rates together – stood at 7.7 and it was falling fast. It peaked at 15.03 in April 2020 after the COVID lockdowns threw millions out of work. But instead of continuing to head back down to the 5.8 level it was before COVID, the Misery Index has steadily climbed under Biden. It is now at 10.94, with increases in inflation swamping the decline in unemployment.
Consumer confidence is down. The University of Michigan’s Index of Consumer Sentiment has been nosediving since last spring and this month hit a low not seen since 2011 – when Biden was vice president.
As the UofM put it, “sentiment continued its downward descent, reaching its worst level in a decade, falling a stunning 8.2% from last month and 19.7% from last February.”
The IBD/TIPP Poll’s Economic Optimism Index dropped to 44 in February (anything under 50 signals a pessimistic outlook). It was 51.9 a year ago. The poll also found that personal financial stress is higher now than when Biden took office.
Dissatisfaction is up. An ongoing Gallup survey finds that nearly two-thirds of the public are dissatisfied with the state of the nation, up from 55% in January 2021. The year before that, only 29% said they were dissatisfied.
This is a fairly remarkable list of failures in just one year. And unless Biden dramatically changes course, we don’t expect this picture will brighten over the next 36 months.
When Ronald Reagan was running against Carter in 1980, he asked Americans “Are you better off than you were four years ago.” The answer was a resounding no. It’s unfortunate that the public will have to suffer three more years of Biden’s ineptitude before it can deliver its answer to that question.
There is, however, one way we are all better off than we were a year ago. We have one less year of Joe Biden in office.
— Written by the I&I Editorial Board