Biden defends economic legacy despite inflation surge during his term

(The Center Square) – President Joe Biden delivered remarks at the Economic Club of Washington, D.C., a nonprofit business group, on Thursday where he defended his economic legacy as his presidency draws to a close.

Biden laid out in detail the legislative and executive actions he took during his term to help the economy, from signing the American Rescue Plan to helping unions to lowering gas prices by emptying out the Strategic Petroleum Reserve.

“On my watch the economy created jobs every single month for nearly four years,” BIden said, boasting that he evaded predictions of a recession in the U.S.

“Well instead our economy grew by more than 3% last year and inflation came way down,” Biden said.

Former President Donald Trump has criticized Biden’s economic plan, arguing his job growth were simply “bounceback” jobs after COVID-era shutdowns led to massive job losses.

Biden’s comments come after the U.S. Federal Reserve on Wednesday cut the federal funds rate by 0.5%, a clear sign that the Fed believes inflation is under control enough to lower rates again.

While Federal Reserve Chair Jerome Powell declined to call it a “victory lap,” experts largely regarded the rate cut as the best economic news in a while.

Biden himself also said it was not a “victory lap” but was “a declaration of progress” and said “our work is not done.” He also repeatedly took swipes at Trump.

“When I came to office, there was no real plan in place, no plan to deal with the pandemic, no plan to get the economy back on its feet,” Biden said. “Nothing, virtually nothing.”

On Thursday, Biden was quick to take credit for slowing inflation, down from 9% earlier in his term to about 3% now. He summed up the claim in a post on X, formerly known as Twitter, on Thursday afternoon.

“Four years ago, I inherited the worst economic crisis since the Great Depression,” Biden said. “Now, inflation and interest rates are falling – good news for consumers, businesses, and workers. There’s still more to do.”

However, Biden’s role in lowering inflation is up for debate, in part because he advocated for and signed about $5 trillion of pandemic-era Congressional spending that experts say helped rocket inflation to the highest level in decades during his term.

“I don’t think we should give politicians credit for anything that’s going on in the economy,” Orphe Divounguy, a senior economist with Zillow’s Economic Research team, told The Center Square. “Basically, research shows that the President really has almost nothing to do with it.”

Divounguy said inflation is determined by “the policy environment…mostly dictated by what Congress is doing” and also pointed to the pandemic and demographic factors. Divounguy credited the Federal Reserve for getting inflation under control despite Congress’ ongoing deficit spending.

Overall, prices have risen more than 20% since Biden took office.

In his speech, BIden pushed back on economists, apparently defending his spending amidst the inflation spike that helped propel prices higher.

“You know, my new economic playbook also rejects the long-held conventional view among economists, many economists, that we had to lower our ambitions to bring inflation down,” Biden said.

The national debt has surpassed $34 trillion during Biden’s term, and deficits now top $1-2 trillion. Before the pandemic, annual deficits never topped $1 trillion.

“They just poured money into the economy, trying to fill the [pandemic] hole, but they probably put a lot more than was necessary to fill the hole, right?” he said. “And you combine all those things, and you get record-high inflation. It started under Trump. It continued under Biden, right? I don’t think it had anything to do with who was president. It had. It had everything to do with the fact that both political parties in Congress right now are big deficit spenders, essentially. It doesn’t matter whether you look left or right. Both parties are big spenders.”