President Biden has defined “Bidenomics” as encompassing almost everything good in the U.S. economy — falling unemployment, robust wage growth, new small business creation. And he’s planning to make the concept central to his bid for a second term.
Economy
5 pillars of Biden’s economic policy and how effective they’ve been
“Bidenomics is just another way of saying, ‘Restore the American Dream,’” the president said in a recent address.
Republicans have defined the term in the almost the exact opposite way. Former president Donald Trump has called Bidenomics “total economic surrender to China and other foreign countries.” House Speaker Kevin McCarthy (R-Calif.) calls it “blind faith in government spending and regulations.”
Beyond the partisan talking points, how has “Bidenomics” changed the U.S. economy?
Since taking office, the president has pushed through dozens of changes and personnel appointments that have upended everything from how workers unionize to how large corporations merge. Biden and his aides have sought to revive domestic manufacturing through a clean energy boom, while also trying — with mixed success — to expand the federal safety net.
Biden’s advisers say the president wants an attempt to move beyond the “trickle-down economics” that defined the last four decades in Washington. Biden frequently says past administrations focused on tax breaks for rich people and corporations, but that he aims instead for “growing the economy from the bottom up and middle out.”
The underlying idea is that new government investment “crowds in” additional investments from private companies, a break from past belief that constraining the public sector would free the private sector to grow more. The result is a federal government that intervenes directly much more than it’s done in decades — to boost unions, block corporate monopolies, and spur economic and industrial growth, among other goals.
“The idea of trickle-down [economics] is if the public sector stops investing — if it just disinvests in our public infrastructure — the private sector will come in and make up the difference,” Jared Bernstein, the chair of the White House Council of Economic Advisers, told Washington Post Live last month. “Joe Biden knows that’s always been wrong, and that, in fact, it’s backward.”
Republicans see “Bidenomics” not as a coherent doctrine, but a collection of sometimes contradictory policies designed to please various interest groups in the Democratic coalition. Critics in both parties have blamed Biden’s attempts to spur growth for exacerbating the highest inflation rates in four decades, and courts have repeatedly blocked his attempts to increase competition among corporate giants. Even to his allies, the execution of Biden’s overarching vision has been, at times, uneven and incomplete.
“Bidenomics is much less a coherent approach to economic policy and much more a grab bag of subsidies designed to advance key interests of the Democratic Party coalition,” said Michael Strain, an economist at the American Enterprise Institute, a center-right think tank.
Here are five key parts of Bidenomics — and how they’ve fared over the president’s first two years in office.
Run the economy hot
Biden’s first major economic act was to sign the American Rescue Plan, a $1.9 trillion stimulus aimed at pushing past the recession caused by the pandemic. Determined to avoid the sluggish growth that characterized the recovery from the Great Recession under President Barack Obama, Biden argued that “the biggest risk is not going too big … it’s if we go too small.”
The result, in part, was the fastest-growing economy in decades. The nation’s gross domestic product surged by roughly 6 percent — a level not seen since the 1980s — as the unemployment rate plummeted and the number of new small businesses soared. The president is fond of emphasizing that the United States has had the fastest recovery among the Group of Seven industrialized Western economies, which he and many economists attribute to the rescue plan. And growth has powered on for two years, including 2023 so far.
But economists are still debating how the rescue plan contributed to inflation. Price increases have proven perhaps Biden’s central political liability, even though Russia’s invasion of Ukraine and supply chain snarls — two factors largely beyond the president’s control — exacerbated the crisis. And although inflation has eased recently, voters still rank it as a top concern.
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VICTORIA – British Columbia is forecasting a record budget deficit and a rising debt of almost $129 billion less than two weeks before the start of a provincial election campaign where economic stability and future progress are expected to be major issues.
Finance Minister Katrine Conroy, who has announced her retirement and will not seek re-election in the Oct. 19 vote, said Tuesday her final budget update as minister predicts a deficit of $8.9 billion, up $1.1 billion from a forecast she made earlier this year.
Conroy said she acknowledges “challenges” facing B.C., including three consecutive deficit budgets, but expected improved economic growth where the province will start to “turn a corner.”
The $8.9 billion deficit forecast for 2024-2025 is followed by annual deficit projections of $6.7 billion and $6.1 billion in 2026-2027, Conroy said at a news conference outlining the government’s first quarterly financial update.
Conroy said lower corporate income tax and natural resource revenues and the increased cost of fighting wildfires have had some of the largest impacts on the budget.
“I want to acknowledge the economic uncertainties,” she said. “While global inflation is showing signs of easing and we’ve seen cuts to the Bank of Canada interest rates, we know that the challenges are not over.”
Conroy said wildfire response costs are expected to total $886 million this year, more than $650 million higher than originally forecast.
Corporate income tax revenue is forecast to be $638 million lower as a result of federal government updates and natural resource revenues are down $299 million due to lower prices for natural gas, lumber and electricity, she said.
Debt-servicing costs are also forecast to be $344 million higher due to the larger debt balance, the current interest rate and accelerated borrowing to ensure services and capital projects are maintained through the province’s election period, said Conroy.
B.C.’s economic growth is expected to strengthen over the next three years, but the timing of a return to a balanced budget will fall to another minister, said Conroy, who was addressing what likely would be her last news conference as Minister of Finance.
The election is expected to be called on Sept. 21, with the vote set for Oct. 19.
“While we are a strong province, people are facing challenges,” she said. “We have never shied away from taking those challenges head on, because we want to keep British Columbians secure and help them build good lives now and for the long term. With the investments we’re making and the actions we’re taking to support people and build a stronger economy, we’ve started to turn a corner.”
Premier David Eby said before the fiscal forecast was released Tuesday that the New Democrat government remains committed to providing services and supports for people in British Columbia and cuts are not on his agenda.
Eby said people have been hurt by high interest costs and the province is facing budget pressures connected to low resource prices, high wildfire costs and struggling global economies.
The premier said that now is not the time to reduce supports and services for people.
Last month’s year-end report for the 2023-2024 budget saw the province post a budget deficit of $5.035 billion, down from the previous forecast of $5.9 billion.
Eby said he expects government financial priorities to become a major issue during the upcoming election, with the NDP pledging to continue to fund services and the B.C. Conservatives looking to make cuts.
This report by The Canadian Press was first published Sept. 10, 2024.
Note to readers: This is a corrected story. A previous version said the debt would be going up to more than $129 billion. In fact, it will be almost $129 billion.
The Canadian Press. All rights reserved.
NANAIMO, B.C. – Former Bank of Canada governor Mark Carney says he’ll be advising the Liberal party to flip some the challenges posed by an increasingly divided and dangerous world into an economic opportunity for Canada.
But he won’t say what his specific advice will be on economic issues that are politically divisive in Canada, like the carbon tax.
He presented his vision for the Liberals’ economic policy at the party’s caucus retreat in Nanaimo, B.C. today, after he agreed to help the party prepare for the next election as chair of a Liberal task force on economic growth.
Carney has been touted as a possible leadership contender to replace Justin Trudeau, who has said he has tried to coax Carney into politics for years.
Carney says if the prime minister asks him to do something he will do it to the best of his ability, but won’t elaborate on whether the new adviser role could lead to him adding his name to a ballot in the next election.
Finance Minister Chrystia Freeland says she has been taking advice from Carney for years, and that his new position won’t infringe on her role.
This report by The Canadian Press was first published Sept. 10, 2024.
The Canadian Press. All rights reserved.
HALIFAX – The Nova Scotia government has introduced a bill that would kick-start the province’s offshore wind industry without federal approval.
Natural Resources Minister Tory Rushton says amendments within a new omnibus bill introduced today will help ensure Nova Scotia meets its goal of launching a first call for offshore wind bids next year.
The province wants to offer project licences by 2030 to develop a total of five gigawatts of power from offshore wind.
Rushton says normally the province would wait for the federal government to adopt legislation establishing a wind industry off Canada’s East Coast, but that process has been “progressing slowly.”
Federal legislation that would enable the development of offshore wind farms in Nova Scotia and Newfoundland and Labrador has passed through the first and second reading in the Senate, and is currently under consideration in committee.
Rushton says the Nova Scotia bill mirrors the federal legislation and would prevent the province’s offshore wind industry from being held up in Ottawa.
This report by The Canadian Press was first published Sept. 10, 2024.
The Canadian Press. All rights reserved.
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