The Economy Takes Center Stage in 2024 Presidential Race: Fact-Checking Biden and Trump’s Claims
The 2024 presidential election is shaping up to be a referendum on the economy, with consumer sentiment about the state of the economy likely playing a critical role in determining the outcome. Both President Biden and former President Trump are touting their economic records, with accusations and counter-accusations flying fast and furious. As voters grapple with the complexities of inflation, job growth, and tax policies, it’s crucial to separate fact from fiction in the candidates’ economic pronouncements.
Key Takeaways:
- Both Biden and Trump have made misleading statements about inflation. Biden claimed inflation was down to 3 percent, but it was actually 3.3 percent in May. Trump asserted inflation was truly 40-50 percent, citing rising energy prices. However, the most widely accepted measure of inflation, the Consumer Price Index (CPI), only rose 20 percent since January 2021, significantly less than Trump’s claims.
- Trump’s claims about job growth under Biden are false. He alleged that 100 percent of new jobs went to undocumented workers, citing a recent increase in foreign-born worker employment. However, official employment estimates do not support his statement, and even with recent growth in the unauthorized immigrant population, it is highly unlikely they claimed all newly created jobs.
- Trump’s assertion that no manufacturing jobs were created in March 2024 is also demonstrably false. Even though the manufacturing sector shed jobs in March, the sector still hired more workers than it lost that month.
- Trump’s attacks on the 2017 tax cuts are misrepresented. Although the law does expire in 2025, resulting in potential tax increases, Biden’s proposed tax increases are far from the "quadrupling" Trump claims, targeting primarily high-income earners and corporations.
- Biden’s claim that the 2017 tax cuts only benefited the wealthy is an exaggeration. While high-income earners did indeed benefit disproportionately from the law, a significant majority of Americans, including those earning median incomes, received tax cuts under the policy.
Untangling the Claims:
The heated debate around the economy warrants a closer look at the specific claims made by both candidates.
Inflation:
Trump’s claim of a "real" inflation rate of 40-50 percent rests on the inclusion of energy prices, which have indeed seen significant increases since 2021. However, the CPI has traditionally excluded mortgage rates (since the 1980s), reflecting the argument that mortgages are partially investments and not solely current consumption. While a recent study suggests that including borrowing costs in the CPI could have resulted in a higher inflation index under Biden’s presidency, economists like Judd Cramer caution against calling such an index the "real" measure of inflation. Ultimately, Trump’s claim relies on a selective use of data and ignores the widely accepted CPI measure.
Biden’s claim that inflation is down to 3 percent falls slightly short, with the CPI reaching 3.3 percent in May. It is important to note that inflation is a complex and multifaceted issue, with global factors like supply chain disruptions and the war in Ukraine playing a significant role in price hikes.
Job Growth:
Trump’s assertion about undocumented workers taking all jobs is baseless. While the number of unauthorized immigrants has increased under Biden’s presidency, it’s simply not at a scale to account for all job growth. The Bureau of Labor Statistics (BLS) estimates that there are significantly more native-born workers than foreign-born workers employed in the U.S., and both categories have seen substantial job growth since 2020.
Trump’s claim about manufacturing jobs is also demonstrably false. The manufacturing sector did lose jobs in March, but it is not unprecedented, with losses occurring in nearly half of all months since the BLS began tracking this data. Even during Trump’s presidency, the manufacturing sector experienced job losses in several months, including the period before the pandemic.
Tax Policies:
Trump’s "quadrupling" claim regarding tax increases is highly exaggerated. While the 2017 tax cuts are scheduled to expire in 2025, Biden’s proposals for tax increases are targeted at high-income earners and corporations, not a broad-based increase impacting all Americans.
Biden’s claim that the 2017 law only benefited the wealthy is also partially misleading. While the top 1 percent received the largest share of tax cuts, a majority of Americans received a tax cut under the law, including those earning median incomes. This highlights the complex and nuanced nature of tax policy, with various provisions impacting different segments of the population.
Beyond the Rhetoric:
The economic debate between Biden and Trump often utilizes selectively chosen data and sensationalized claims to sway voters. However, a balanced examination of readily available data suggests that both candidates are employing misleading rhetoric to paint their economic records in a more favorable light.
The 2024 election will be a pivotal one for the U.S. economy. It’s essential for voters to critically evaluate the candidates’ claims, relying on reliable sources of information, and consider the intricacies of each issue beyond simplified narratives.
