Jared Bernstein, the chairman of the president’s Council of Economic Advisers, spoke on CNBC, praising President Joe Biden’s policies for benefiting workers. However, these statements have been seen as political propaganda by many, as the reality paints a different picture.
Biden’s policies have resulted in detrimental effects on both workers and households. The excessive fiscal stimulus has led to a surge in inflation in the US economy, reaching levels not seen in four decades. Throughout 2022, the majority of workers experienced negative wage growth. The US economy is now plagued by wage inflation, and core inflation remains stubbornly high, likely leading the Federal Reserve to raise interest rates to slow down the economy.
Higher interest rates have proven harmful to households seeking to purchase consumer durables, especially vehicles, and have priced many potential home buyers out of the housing market. The gap between household incomes and the cost of buying a home has reached a multi-decade high, making the dream of homeownership a mirage for numerous families.
Credit card users are also feeling the impact, as borrowing costs on credit cards rise, and credit standards tighten. Delinquencies on credit cards are increasing as some households struggle to meet their payment obligations. The federal deficit has soared due to Bidenomics, and despite this, the pursuit of policies that further increase the deficit continues. For instance, Biden’s revised student loan moratorium will contribute nearly $500 billion to the federal deficit over a 10-year period. Spiraling deficits drive interest rates up, affecting household consumption and business investment.
Biden’s new vehicle mileage regulations pose a threat to the vehicle manufacturing industry. Car manufacturers will be forced to meet higher mileage requirements by selling more electric vehicles (EVs), even though most consumers are hesitant to purchase them. As a result, car companies may be compelled to cut EV prices and sell them at a loss, leading to significant financial losses. For instance, Ford reported a $5 billion loss on its EV operations in the second quarter. To offset these losses, vehicle manufacturers are likely to raise prices for internal combustion engine vehicles, making new internal combustion engine vehicles more expensive than ever.
In conclusion, while the administration touts Bidenomics as beneficial for Americans, the reality indicates that it has resulted in inflation, wage stagnation, increased interest rates, and detrimental impacts on households and the vehicle manufacturing industry. Critics argue that Bidenomics is not only an economic failure but also carries authoritarian implications. The true impact of these policies remains a subject of ongoing debate and concern for the future of the American economy.
