The Truth About Joe Biden’s Economy

Americans are feeling the pain at the pump and at the grocery store. Inflation is at a 40-year record high. Yet, President Joe Biden and his administration say that the economy is better than ever. This week, Distinguished Visiting Fellow Stephen Moore explains the truth about Joe Biden’s economy.

Michelle Cordero: From The Heritage Foundation, I'm Michelle Cordero and this is Heritage Explains.

Cordero: Inflation rates hit a 40 year high last week, coming in at 9.1%. The cost of everyday staples also increased. The price of eggs went up 33.1%, meat 8.2%, gasoline 59.9%, used cars 7.1% and air travel 34.1%. This is all in addition to supply shortages. Yet as the economy is flashing huge red warning signs, President Joe Biden and his administration are telling us something different.

Joe Biden: Look, here's where we are. We have the fastest growing economy in the world, the world, the world. We have 8.6 million new jobs just since I got in an office. Unemployment rates down to 3.6%. We've reduced the deficit last year by $320 billion, this year going to reduce it by $1.7 trillion dollars, trillion dollars.

Clip: When you look at inflation, when we look at where we are economically, and we are in a strong, we are stronger economically than we have been in history. When you look at the unemployment numbers at 3.6%, when you look at the jobs numbers, more than 8.7 million of new jobs created, that is important. But we understand that gas prices are high and we understand that food costs are high. And that is because of a once in a generation pandemic and also Putin's war. And that's just the facts.

Cordero: So what's the truth? Are we growing faster and stronger than ever, or is our economy in a downward spiral? Today Stephen Moore, a distinguished fellow in economics at Heritage, will explain. Our conversation after this short break.

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Cordero: Steve Moore, thank you so much for joining us.

Stephen Moore: Hi, Michelle. Great to be with you.

Cordero: Okay. So we know what we're seeing at the pump and at the grocery store, we're feeling the pain. So why is the Biden administration saying the economy has never been better? What are they looking at?

Moore: Well, I think first of all, this really suggests that the people in the White House are just out of touch with what's going on in real America. We've always talked about Washington being a bubble, where politicians of both side of the aisle are just not in touch with what's happening in main street America. And this is a really a picture perfect example of that, where it's laughable and it's actually insulting for the Biden administration to tell people who are seeing their incomes being ravaged by the highest inflation rate in 40 years.

Moore: You see there was a study that came out recently that a lot of families are really having to cut back and even the essentials that they buy because their incomes are falling relative to the price of everything from gasoline to buying milk and all the other things that people have to buy, rent.

Moore: And so it's not a good economy. 82% of Americans, according to New York Times poll, and they're hardly on the right, Americans say the country's headed in the wrong direction. And it is. It is headed in the wrong direction. We've got the high gas prices. We have a situation now where I believe we're in a, what I call a soft recession, where the last two quarters have been negative, now only a little bit negative, but still that's officially in a recession.

Moore: And the real question now, I think going forward, Michelle, is whether we're going to have a crash landing here. Whether we're going to be able to glide out of this and we can talk about that, but I'm worried.

Cordero: So another thing we've heard from Joe Biden is that Americans have record savings. Where's he getting that? Is that true?

Moore: Yeah. I'm working on a paper right now, that's why I was laughing. About the things, the multiple things that Biden has said about the economy that are not true. And that's one of the ones I don't even understand.

Moore: Sometimes you can cherry pick data and say, oh, look, this shows, but we've just lived through a stock market crash where the economy's lost $8 trillion in savings. So it's really delusional to say Americans have record high savings when every day that goes by, people are losing their lifetime savings. I mean, my God, my wife and I just looked at our 401k plan and I'm not rich, we lost a couple hundred thousand dollars just in the last six months of our lifetime savings because of the crash in the market.

Moore: And then the fact is that I was looking at credit card data, Americans aren't saving, they're dis-saving, they're running up their credit card so they can pay their bills. So that is another one that it just doesn't comport with reality.

Cordero: So let's talk about the job market. I'm just going to kind of run through some of these indicators. The left claims that the job market is growing. Is that true?

Moore: Look, the job market is good right now. It is good. And there are jobs out there. So my advice to people, if you're been sitting on the sideline for two years, like a lot of people have throughout COVID, now would be a good time to get a job while they're still available. Job growth is definitely slowing. And so over the last three months, we've seen there's fewer Americans working today than there were three months ago.

Moore: And I think we're all a little puzzled. Even the economics team here at Heritage, we have a lot of discussions about why is this happening? Why aren't Americans filling the jobs that are out there? And I do think the government benefits is a big part of this, that we're paying people not to work.

Moore: And one of the things, I mean, the people regulars here at Heritage know that Heritage played such a big role in the 1990s on the historic welfare reforms, where we required people to work to get benefits. We all believe in a safety net, but you have to either be working or looking for a job or getting training.

Moore: And people should realize that under Obama, then especially so under Biden, we've eviscerated all of those. Almost all of the work requirements are gone. And so you've got people who can get rental assistance, food stamps, free healthcare, $300 a week per child benefits, unemployment benefits, all of these things. And they add up to, and by the way, this is all tax free, without working an hour, you can make 70, $75,000 a year. So we have to get back to the idea of work fair.

Cordero: So you're saying, going back to the question that the job market is growing, but that's due to the circumstances left over from the pandemic.