President Joe Biden’s economic performance is so indefensible that he has resorted to distorting his predecessor’s record, as if that will distract from the current economic malaise. It’s much like how Pinocchio, when caught doing wrong, lied about everyone around him to distract from his own failures and to blame others.
But the average American is suffering financially so much that no amount of gaslighting can distract from their current plight, and the numbers prove it. Sixty percent of American families are living paycheck to paycheck, and a record number of people have had to take on a second or third job.
That still isn’t enough to pay the bills, which is why there’s a record $1.1 trillion of credit card debt and a collapse of the savings rate to levels lower than before the pandemic. The combination of racking up debt while depleting assets caused household net wealth to fall $1 trillion last quarter. But the bigger story is the real (inflation-adjusted) numbers.
Real household net wealth has now fallen below where it was when Mr. Biden took office. In fact, it’s at the lowest level since the third quarter of 2020. Real earnings tell a similar story about Americans’ finances under Mr. Biden, with real weekly earnings down about 5 percent since he took office.
For the typical American family with two parents working, that’s the equivalent of losing over $5,000 in annual income. This decline in real earnings is from inflation pushing prices up much faster than wages. Under Mr. Biden, annual inflation has outpaced earnings growth in 27 of the last 31 months.
The average American worker is now paying $4.97 per hour in the hidden tax of inflation, effectively doubling how much he or she pays in federal income tax. That inflation is a direct result of Bidenomics, an agenda best defined as government overspending and overregulating, combined with borrowing and printing trillions of dollars. The predictable result was devaluation of the dollar.
The fastest inflation in 40 years resulted in a rapid rise in interest rates, which pushed up financing costs. Combined, these effects have pushed the cost of homeownership to record highs. The monthly mortgage payment on a median price home has risen by over $1,000 under Mr. Biden, costing an American family an extra $13,000 per year for the same house.
This has driven homeownership affordability to new lows—by some metrics it’s the lowest on record. With an entire generation of Americans unable to afford their own homes, they’ve turned en masse to renting, which has also pushed rents to record highs.
These facts stand in stark contrast to the economic record of Biden’s predecessor, which he pejoratively calls “MAGA-nomics.” Regardless of the name assigned to it, the period before Mr. Biden took office was marked by widespread improvements in Americans’ financial wellbeing.
Real wages and real net wealth rose, homeownership affordability improved, more people entered the labor force, and those working could increasingly live on one full-time job. Those are hallmarks of honest success, not a fictional tale of supposed prosperity.
Instead of acknowledging reality and his own culpability, Mr. Biden purposely muddies the waters, throwing out undefined terms like “trickle-down economics” and misrepresenting the Tax Cuts and Jobs act as a “tax cut for the rich” even though IRS data show the benefits went disproportionately to the middle class.
With each fib, the White House loses credibility and their gaslighting becomes less effective, just as Pinocchio’s nose grew with each lie and it became blatantly obvious that his stories couldn’t be trusted. That’s why, despite overwhelmingly positive media coverage, Bidenomics is viewed with such disfavor today.
You can only tell people to ignore their lying eyes and empty wallets for so long.
E.J. Antoni is a public finance economist at the Heritage Foundation and a senior fellow at the Committee to Unleash Prosperity.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
E.J. Antoni on December 10, 2023
