President Biden's economic legacy is marked by both positive growth and lingering challenges. While the economy has rebounded from the COVID-19 pandemic with low unemployment and strong GDP growth, soaring inflation and persistent inequalities continue to plague American households.
As President Biden prepares to depart the White House, he leaves an economic legacy marked by a historic pandemic that paralyzed consumers and businesses across the U.S. After inheriting a COVID-scarred nation in 2021, Mr. Biden focused on righting the economy, a strategy that economists told CBS MoneyWatch is visible in the country's solid GDP growth and low unemployment.
By several key measures, the economy is stronger than it was four years ago: The jobless rate is near a 50-year low, wages are growing and the U.S. managed to sidestep a recession widely expected by many on Wall Street as the Federal Reserve moved to curb inflation by ratcheting up interest rates. 'He should have a strong legacy when it comes to the economy,' Mark Zandi, chief economist of Moody's Analytics, said of Mr. Biden. 'He inherited an economy that was flat on its back because of the COVID pandemic, and he's leaving an economy that's flying high, at least in the aggregate,' Zandi added. 'How much he can take credit for that, it's a reasonable debate, but I think he deserves a lot of credit.' Zandi pointed to several pieces of landmark legislation passed under Biden, including the $1.9 trillion American Rescue Plan Act, or ARPA, as helping to stabilize the nation and produce growth that has surpassed most other major economies around the world. Biden also scored some wins on health care, such as a new $2,000 out-of-pocket spending cap on prescriptions for Medicare enrollees and a $35 cap on insulin prices. Yet in retrospect, he added, additional trillions in federal stimulus may have played a part in the soaring inflation of the last few years, which Zandi said was also fueled by the economic impact of Russia's invasion of Ukraine. ARPA 'was very controversial, but at the end of the day it got the economy back to full employment,' Zandi said. Deep structural problems Although Biden's policies were key in helping the economy recover from the pandemic, millions of Americans continue to struggle with a cost-of-living crisis worsened by the hottest inflation in four decades. Long-term challenges in housing affordability only deepened during the Biden administration, while U.S. wealth inequality today remains near record levels. To be sure, health care, child care and education costs have outpaced inflation for years, weighing on millions of households and making many families vulnerable to even minor downturns. But the inflation spike in 2022 intensified these existing financial pains, said Lindsay Owens, executive director of the Groundwork Collaborative, a progressive economic think tank. 'The American economy for a long time has been characterized by a lack of affordability for the biggest ticket items,' Owens said. 'Housing has been out of reach, health care has been expensive, child care is expensive — that was all true before Biden.' Meanwhile, a Biden plan to sweep away student loan debt was largely shot down by the courts, although the Department of Education used other means to offer relief to millions of borrowers. Housing costs continued to soar under Biden due to rising home values as well as soaring mortgage rates after the Federal Reserve hiked interest rates to battle inflation. The upshot: Under Biden, many households remained dogged by the same long-term pocketbook issues that have prevailed for decades under previous presidential administrations. During the pandemic, the soaring cost of essentials like food, fuel and rent only deepened the country's widespread precarity — a gnawing sense of financial insecurity that has left tens of millions of Americans vulnerable to job losses, medical problems and even modest economic dips. Ballooning debt Biden's legislative wins — ARPA and the Infrastructure Investment and Jobs Act in 2021, and the Inflation Reduction Act and the CHIPS Act in 2022 — added trillions in additional federal spending. The idea underlying these efforts was to rejuvenate the U.S. economy by investing in key sectors, such as by building semiconductor chip plants, rebuilding U.S. roads or accelerating the shift toward green energy. But those efforts will likely take years to pay off, economists note. In the meantime, the nation's debt has ballooned to a record $36.2 trillion as of mid-January due to a combination of fiscal stimulus authorized by both Biden and Trump, as well as Trump's 2017 tax cuts. With federal spending outpacing revenues, the nation will face tough choices, such as whether to raise taxes, cut federal programs or both. Asked to describe Biden's economic legacy, Cato Institute vice president of general economics Scott Lincicome summarized it in one word: 'Frustrating.' 'If you could look at the basic fundamentals — economic growth, jobs — things have been pretty good,' Lincicome, who describes himself as a 'libertarian free marketer,' added. 'But if you look beneath the hood, there are some rather significant problems.' Chief among them are the nation's spiraling debt, Lincicome said
Economy ECONOMY INFLATION BIDEN JOBS DEBT HOUSING HEALTHCARE INCOME INEQUALITY
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