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ANTONI: Families Are Hurting From The Biden Administration’s Economic Brain Freeze

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E.J. Antoni Contributor
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The Biden administration seems willfully ignorant of how American families are hurting financially. The president himself, while munching on an ice-cream cone, pronounced the economy “strong as hell,” as if he could make it so by executive fiat. A plethora of data tell a very different story: the economy is melting faster than the president’s ice cream.

Immediately before Biden took office, the economy was growing at an annualized rate of $1.5 trillion and adding an average of 1.4 million jobs per month — an incredibly robust rate of growth. Inflation was almost non-existent — just 1.4% — and real wages were rising.

In less than two years, bungling throughout the federal government has sent the economy into a tailspin.

By printing trillions of dollars to fund equally large budget deficits, the government created an inflationary nightmare. Onerous regulations have simultaneously kept a choke collar around the neck of American producers, especially in the energy sector, while the expansion of welfare and removal of work requirements has decimated the labor market.

Eighteen months after taking office, Biden had driven inflation so high that prices were rising about as fast in a single month as they rose in the entire year before he became president. Wholesale inflation, which measures the rise in prices which businesses pay, has set 13 new record highs under Biden and has been in double digits for seven months, more than a third of his presidency.

Unlike inflation, job growth has slowed markedly under Biden, averaging less than half where it was during the recovery under Trump. And the $1.5 trillion annualized growth rate was thrown in reverse only a year into Biden’s term, with gross domestic product contracting in both the first and second quarters of this year. This recession should have come as no surprise with investment declining and consumer spending slowing to a crawl.

American families simply cannot afford to live in Biden’s America. Their real disposable incomes have fallen 11.7%, homeownership affordability is down 32%, monthly savings have collapsed 83.1% and credit card debt has ballooned 22.7%, all since Biden took office. Real earnings have also fallen 5.5%, meaning that the average family has lost over $6,000 in annual purchasing power. Adding insult to injury, so far in 2022, the average 401(k) has lost $34,000.

There simply are no data that in any way support the president’s claim of the economy being “strong as hell.” The economy more closely resembles a splattered scoop of ice cream fallen on the sidewalk than the cone Biden held while making that proclamation. Sadly, economic indicators are forecasting things will get worse for Americans’ finances.

Consumer spending is running on fumes as families deplete their savings and take on debt to try and sustain their standard of living. Similarly, businesses are only being sustained by a backlog of unfilled orders. Prices continue rising and energy prices in particular are poised to spike again this winter. In the coming months, the economic pain will intensify.

History will likely judge Biden harshly because he had the benefit of hindsight; his administration was able to look back at its immediate predecessor and see what worked and what did not. It has mysteriously chosen to ignore the successes, like increased American energy production, and double down on the failures, like paying unemployment “bonuses” which incentivized labor shortages.

In the end, the optics of brazenly ignoring mountains of economic data are quite indecorous. Those who make such assertions not only appear ignorant but also prideful. It takes much hubris to believe that you can convince the masses to ignore everything they see around them simply by your own royal decree.

E.J. Antoni is a Research Fellow for Regional Economics in The Heritage Foundation’s Center for Data Analysis and a Senior Fellow at the Committee to Unleash Prosperity.

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