Explainer: Bidenomics and President Biden’s Economic Vision
On June 28th, President Biden delivered a speech at Chicago's Old Post Office, outlining his economic vision. To explain his economic strategies before the 2024 election, Biden used the term "Bidenomics" to summarize his economic philosophies. This term gained traction as the Biden administration delineated its economic agenda, encompassing approaches such as fiscal stimulus (cutting taxes or increasing spending to revive the economy), infrastructure investment, social safety net expansion (support for low-income or vulnerable families and individuals), climate change initiatives, and tax policy changes. Specifically, the Biden Administration highlights three key pillars to their economic strategy: (1) Making smart public investments in America; (2) Empowering and educating workers to grow the middle class; (3) Promoting competition to lower costs and help entrepreneurs and small businesses.
This article explores the critical components of Bidenomics and the debates surrounding its effectiveness.
Bidenomics and Its Evolution
"Bidenomics" emerged as a description of the economic policies anticipated under his leadership. Similar terminologies like Trumponomics and Reaganomics have been used to denote other presidents' economic philosophies. In the case of Bidenomics, it encapsulates a range of economic policies aimed at nurturing the middle class and fostering economic equity. President Biden's focus on growing the middle class stems from the belief that this approach benefits a broader swath of Americans than favoring the wealthy minority. His economic strategies include fiscal stimulus, infrastructure investment, social safety net expansion, climate change initiatives, and tax policy adjustments.
Compared to Reaganomics and trickle-down economics, which refers to a theory that financial benefits given to big businesses and the wealthy minority will eventually trickle down to smaller businesses and the average consumer, Bidenomics focuses on uplifting the middle class specifically through record job growth, pandemic recovery, decreasing inflation, and reducing the federal deficit.
The American Rescue Plan Act
The American Rescue Plan Act, which Biden signed into law on March 11, 2021, injected approximately $1.9 trillion into the economy to help struggling Americans. The legislation provided vital financial aid to sectors hit hardest by the COVID-19 pandemic, including direct cash payments and loans. The act addresses the challenges individuals, businesses, and local governments face during the pandemic, aiming to stimulate economic recovery. The financial aid included the $242 billion in stimulus payments distributed to millions of Americans and their families.
The Plan also expanded the Child Tax Credit, increasing the payment amount, extending the credit to people in Puerto Rico and U.S. territories, and making it easier to access for folks. Moreover, the CHIPS Act, a component of the American Rescue Plan, reinforces the semiconductor industry by fostering domestic chip production. This move bolsters America's self-reliance and technological advancement while mitigating supply chain vulnerabilities.
Infrastructure Investment and the American Jobs Plan
The American Jobs Plan and Infrastructure Investment were designed to rejuvenate infrastructure in this country, generate jobs, and revitalize industries. The plan entails substantial investments in transportation, including roads, bridges, public transit, railways, and airports, to enhance efficiency and connectivity. It also focuses on expanding broadband access to bridge the digital divide and boost economic opportunities for all. Additionally, the proposal addresses water systems, education, and federal buildings, aiming to modernize and improve public services. The Plan emphasizes sustainability and invests in clean energy projects, electric vehicle infrastructure, and creating new jobs in emerging industries. Updating infrastructure and focusing on sustainability aligns with Biden's goal of fostering a fairer and globally competitive economy. This approach caters to immediate infrastructure needs and prioritizes clean energy and environmental sustainability.
Empowering Asian American, Native Hawaiian, and Pacific Islander Communities
Under Bidenomics, there is a focused effort to address the challenges faced by Asian American, Native Hawaiian, and Pacific Islander (AANHPI) communities. The administration aims to promote inclusivity, economic opportunity, and social justice for these groups by implementing targeted policies. According to the White House, the Administration’s efforts have lowered the Asian American unemployment rate to pre-pandemic levels and increased the Asian American employment rate to the highest since 2008. In addition, there are advances in improving access to healthcare, education, and support for AANHPI-owned businesses while addressing racial discrimination and hate crimes.
Criticisms of Bidenomics
Critics of Bidenomics have raised several critical concerns regarding the administration's economic policies. One of the primary worries centers on the potential impact of increased government spending on the federal deficit and national debt. Critics argue that the large-scale fiscal stimulus, such as the American Rescue Plan Act and proposed infrastructure investments, may lead to substantial government borrowing, burdening future generations with debt obligations.
Additionally, there are fears about the risk of inflation from injecting massive amounts of money into the economy, as critics fear this could result in higher consumer demand and rising prices for goods and services. The administration's proposal to raise taxes on high-income individuals and corporations has also faced resistance, with critics contending that these tax increases may hinder economic growth and reduce job creation. Moreover, concerns about expanding government regulations and policies promoting more vital labor unions and a higher federal minimum wage have sparked debates over their potential impact on business operations and investment decisions. Overall, these criticisms highlight the ongoing scrutiny and controversies surrounding the effectiveness and possible consequences of Bidenomics.
President Biden's ambitious economic agenda under Bidenomics is expected to face challenges and criticisms, including inflation and political dynamics concerns. Despite this, the Federal Reserve projects the U.S. will no longer enter a recession by the end of the year. Inflation is also cooling down as supply chains and other issues caused by the pandemic return to normal. The job market continues to grow, and states will receive $40 billion soon to expand broadband infrastructure. While Bidenomics is primarily a campaign message, the economy has grown more robust over the past couple of years.
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References and Further Reading:
Dylan Scott. Vox. 3 reasons the US might actually fix inflation without a recession. 29 July 2023.
Scott Simon, Eric McDaniel. NPR Weekend Edition. 'Bidenomics' is everywhere. Here's what it could mean for the election. 8 July 2023.
Josh Boak. The Associated Press. The president claims 'Bidenomics' is finally the cure to trickle-down 'Reagonomics,' but his opponents have a different definition. 3 July 2023.
U.S. Bureau of Labor Statistics. Table A-2. Employment status of the civilian population by race, sex, and age - 2023 M07 Results.
U.S. Department of the Treasury. FACT SHEET: The American Rescue Plan Will Deliver Immediate Economic Relief to Families. 18 March 2021.
The White House. Bidenomics Is Working: The President’s Plan Grows the Economy from the Middle Out and Bottom Up—Not the Top Down.
Merriam-Webster. Trickle-down theory Definition & Meaning - Merriam-Webster.
Josh Boak. AP News. What's 'Bidenomics'? The president hopes a dubious nation embraces his ideas condensed into the term. 3 July 2023.
