Deconstructing Biden's claim that 'I reduced the federal deficit'

[Mika-El]

The US as is the case with all countries with developed economies chose the route of kick-starting economies after Covid 19 by increasing government spending. It is a short term fix. Its like administering medicine. It has a serious side effect, inflation and the longer you take it the worse the side effect is. Because the US has the largest economy that kick started itself through government spending, the inflation has a different over all impact than other Western nations. Its hard to compare other than to say all of us in the West have rampant inflation but each country is a bit different. Inflation won;t go down until demand is less than supply which probably means about 1-2 years to get supply levels back up to where they once were. However the energy sector is another story.

We all come down to addicts of fossil fuel and so OPEC can exploit our addiction by holding down supply levels. We also have to be realistic in that India and China directly compete now for the same energy as the West driving up prices and that direct competition did not exist to the same intensity 30 years ago.

I would say this to Americans. You are not immune to world economic conditions associated with disruptions in supply chains and that is because you chose to use cheap labour in other countries. The US like most of the West now is specializing its economy into computer soft and hardware and as always military technology. It means many Americans who are not being brought up computer literate become permanently underclass. Its a Western phenomena we see. Its not an excuse it is reality.

You want to get to the root of the problem ask yourself, why is the number one economic activity of the leading Western nations as well as China and Russia military related? Why? Why do we put all our energy into the development of weapons and then wait for the spin off to make its way to consumer products. Why? Imagine if you took just 25% of the manpower from the military industrial network and reapplied it to energy and agriculture.

Well we humans have not yet evolved past our pack animal behaviour. We still engage in pack behaviour. Our packs are larger but we still get led around by alpha males with inflammed butts (the more inflammed the more they are likely to lead-an actual fact of baboons and I would contend humans) and instead of sticks and rocks we now use missiles.

The irony is we are all living in banana republics so to speak.

 

[jonny5]

No one ever talks about how Trump reduced the debt at the beginning of his term. Clear media bias.

Donald J. Trump on Twitter

“The media has not reported that the National Debt in my first month went down by $12 billion vs a $200 billion increase in Obama first mo.”

web.archive.org

That guy is a ****ing economic genius. No longer relevant? We need more policies like his to reduce the debt.

Correct, no longer relevant, certainly not to this thread. The topic is about Biden claims. Do you think he's actually reducing the deficit given his budget request increases it?

 

[jonny5]

Only in America could spending 150% of federal revenue verses spending 200% of federal revenue be viewed as an accomplishment.

It might be an accomplishment if he had actually done anything. But again, he signed to massive spending bills. And this inflation is increasing the cost of the borrowing. In his first year we added another trillion in debt. This year will be pretty much the same. His budget request adds another 10 trillion.

And its not even mostly his fault. Its all driven by entitlements, which he and congress, and both parties, and every President, have done nothing about. They just keep expanding them.

 

[bluesmoke]

First off when you post to a political forum your political opinion and then state the above to tell people who disagree with you not to respond why come on this forum? Are you that insecure you can't handle people who disagree with you.

Next like some I did read the article you quoted and you need to read it again because you have taken it out of its actual context and misrepresented what it said.

Biden has not stated he has reduced any deficit. You and Trumpets on the other hand engage in that kind of simplistic misrepresentation to suggest a President creates inflation and reduces deficit because YOU project a simplistic misunderstanding as to how economy works and what transpires in a complex set of cause and effect relationships to trigger inflation, deficits, etc.

The moment Trump ordered a very large increase in government expenditures to kick start the economy in response to Covid 19 it triggered both inflation and of course deficits. That is what directly happens as a result of government expenditures. The cause and effect has been documented by neutral economic sources with no political idelogy in the matter like you.

Biden did not trigger inflation and reduction of deficits is a ridiculous thing to discuss when the money borrowed has triggered interest payments adding to the deficit.

Next can you get real as to the US deficit and what adds or subtracts from it.

The Congressional Budget Office is apolitical. It provides the analysis of any udget and its economic effects and projected deficits and guesses how budget deficits drive federal debt. No matter who is in office they follow their warnings.

Are you also not aware the budget deficits from government expendures went to unprecedented levels in 2020. Why do you Trumpets ignore that?

Your government has the Federal Reserve, the Government Accountability Office,the aforementioned Congressional Budget Office and the Office of Management and Budget not to mention the Treasury Depart all compiling statistics and date on inflation, deficits, budgetary spending and each state has at least one department trying to do the same, At the federal government level aging population, rising interest payments, and spending for healthcare programs are major factors that impact on future economic growth and no Biden or Trump can not pass magic policies that in a 4 year period poof fix things. The economy is in constant transition effected by both long and short term trends and simplistic arguments that assume you can isolate a time period to look at economic performance is dumb. Its just stupid.

No you can't freeze frame or select an arbitrary time period and then infer from it anything. Its not how risk forecasting works.

Biden did say he reduced the deficit, which has been proved. The, though, deficit is higher than projected by the CBO. So, one could argue he increased the deficit by that reasoning. The reason for the deficit, however, is the increased spending due to pandemic relief expenditure. Take your pick of which you'd rather have. A deficit even lower than the reduction under Biden or the socio-economic advantages to Americans of pandemic relief, which included direct payments of $ to Americans.

Fact check: Deconstructing Biden's claim that 'I reduced the federal deficit'

President Joe Biden has been taking credit for reducing the federal budget deficit, the annual gap between the money the government takes in and the money the government spends.

www.cnn.com

 

[Mika-El]

Correct, no longer relevant, certainly not to this thread. The topic is about Biden claims.

It is relevant you just don't want to deal with it. Th e rhetoric you want to focus on can be found at:

Remarks by President Biden On Economic Growth, Jobs, and Deficit Reduction | The White House

Roosevelt Room 11:01 A.M. EDT THE PRESIDENT: Well, good afternoon. Before I begin, let me tell you, I’ll be around to answer questions on a lot of things, but I got 600 Olympians waiting out there for me. If you keep me too long, they’ll rush the place. And — all kidding aside, I —…

www.whitehouse.gov

This thread of course is plucked from the headline from a CNN artucle:

Fact check: Deconstructing Biden's claim that 'I reduced the federal deficit'

President Joe Biden has been taking credit for reducing the federal budget deficit, the annual gap between the money the government takes in and the money the government spends.

www.cnn.com

You are deflecting from Trump's role in the creation of deficits by trying to deliberately isolate your discussion to Biden.

The point is neither politician created the economy they inherited it. Each is in office 4 years maybe 8. . To suggest they could create a policy that would change the economy significantly within 4 years is idiotic. Even if a policy was carried out they take years to implement and circulate. Furthermore supply chains which they are meant take on new forms based on market conditions the policies designed to regulate them never contemplated that often prevent or render obsolete the policy.

So there is no magic pill policy you swallow and presto the economy changes.

And so?

Do you want to actually discuss the economy or engage in partisan pissing on Biden....you certainly aint interested in discussing the economy.

Biden did in March 2021 enact the American Rescue Plan and passed the Infrastructure Investment and Job Act in November of 2021 which added $550 billion in additional investments by the federal government. In his first year in office there was a sizeable increase in the GDP, employment levels, wages and stock market returns and continuing high rates of inflation. In his first year the GDP grew 5.7% (highest growth rate since 1984) and the unemployment rate fell from 6.4% in January 2021 to 3.9% by December 2021.

However inflation soars as a result surges in demand for goods (directly ignited from money provided by government relief programs), and of course supply restrictions in port capacity and microchips all over the world causing world wide inflation not particular to just the US.

The West is in a high risk zone where worker wages and benefits have increased very quickly because of government spending but its also triggering inflation too.
The gamble is the wage and benefit increases are supposed to offset the increase in prices from inflation but they don't. They lag behind. We all feel it as food, gas, electricity prices rise.

Interestingly pro Trump cultees who constantly talked about Trump boosting the stock maket do not discuss this: the S&P 500 stock market return was 37.4% in Biden's first year and that is the highest of any modern president. (source: Emily Graffeo; Lu Wang (November 3, 2021). "S&P 500 Is Up 37% Since Biden's Election One Year Ago, Setting Presidential Record". Bloomberg News.)

Now why Biden is trying to claim credit for lowering the deficit is that the neutral CBO forecast in July 2021 that the budget deficit in 2022 (Biden's first budget year) would be $1.2 trillion, down from $3 trillion in 2020 and 2.8 trillion in 2021.

The reason for that is in 2020 and 2021 Trump in fact triggered rises to the deficit from his increased government expenditures. That is now going down because Biden is not spending as much as Trump did. That doesn't make one worse than the other. Trump did what he did in response to Covid 19, He engaged in government spending something Trump supporters openly call communism and socialism and come on this thread and others to condemn Democrats for wanting to do.

So the point is partisan name calling giving either politician credit for anything or blame for everything is pointless.

 

[mrjurrs]

Would you please remind us when the recession officially ended, thanks.

Go ahead, it appears as if you want to make a point...

 

[American]

Fact check: Deconstructing Biden's claim that 'I reduced the federal deficit'

President Joe Biden has been taking credit for reducing the federal budget deficit, the annual gap between the money the government takes in and the money the government spends.

www.cnn.com

TLDR - Even CNN says its false

Any deficit reduction is due to simply not passing even more pandemic aid, though Biden/Dem Congress gave it their best shot. They actually INCREASED the deficit relative to pre pandemic levels by passing 2 major spending bills totaling 4 trillion in additional spending over normal budget levels.

Deficit
2019 - 1T
2020 - 3.1T
2021 - 2.8T
2021 estimate - 1.1T

And Biden's budget request is to increase the deficit to 1.7T by 2032. But expect to keep hearing this lie told over and over. And to keep adding trillions in debt. So long as no one is will to sacrifice any spending and most americans dont want to pay income taxes, nothing will change.

Defense spending is 700bn, more than the next 5 countries combined. And it can be cut too.
Republicans only care about deficits when democrats are in power.

There, no need to post if thats all you have.

We're not supposed to even have a deficit! What's everyone debating?

 

[Mika-El]

We're not supposed to even have a deficit! What's everyone debating?

Who said we are not supposed to have a deficit?

You? Kanye West? To start with here is what I would tell Kanye and you:

1-the level of economic activity at the time you look at the deficit as well as the rate of inflation at the time you look at the deficit distort its actual meaning so I do not think you will hear any economist jump to conclusions about a government's fiscal performance simply looking at the deficit in any given point of time;

2-next if Kanye or you are in fact interested, when the economy of a nation under performs it doesn't take in revenue from taxes it needs to operate its government services so it borrows money and vice versa if its doing well and taxes are coming in it doesn't spend as much. Deficits increase when economies decline. Deficits then decrease when economies increase. Inflation however is a little more complex. It can be triggered by government expenditures when the economy is doing badly and governments spend to kick start the economy. Then as the economy gets better and the deficit decreases and government expenditures decrease, inflation doesn't magically stop. Business cycles can be complex as to supply and demand levels and you of course know if the demand for a product is higher than what is available up goes the price but if the supply is abundant but the demand is low down goes the price. The amount of supply can be kept artificially low to assure the demand is higher keeping prices high and that is what is happening now with gas and oil and you can thank OPEC for that.

3-Tell Kanye if the government is making proper adjustments for the ups and downs in its economic activities (which is a big if) it then might run what is called a more accurate measurement of debit the government owes called a structural deficit. So deficits constantly go up and down, so should supply and demand levels if you don't have monopolies.cartels like OPEC fixing prices.

The fact is all Western nations have chronic deficits. They always have and will always have. Its a basic feature of capitalism. The alternative is state run and controlled economies which in fact create a permanently depressed market that is fixed and under performs for its own citizens so that it can compete with capitalist economies.

Now see here is why I love you Americans. You don't understand basic economy. You panic when you hear the words recession, inflation, depression, deficit, government spending. You got no clue whether any of it is bad or good but you get spooked by all of it.

Trumpets are my favourite. They follow some fat scam artist who never balanced a budget and who made his money borrowing money to pay borrowed money and building up ponzi and pyramid scams and then declaring bankruptcy and then rebuilding the same scams. He's a genius to Trump cult followers even though he has no clue how to balance a budget let alone create a business that could last past a few years.

Then we have a guy like Biden who in essence is not that much different than Nixon, Bush, Carter, Bush Jr. The only thing anyone can really say is that unlike Reagan or Trump he rejects trickle down theory a belief that Reagan's cronies came up with that said let rich people avoid paying taxes and when you do that they will spend it on the economy instead. Of course they never did and there was no trickle down. Other then that one idiot theory pretty much every American politician does what every Western capitalist leader has done, go from cycle to cycle spending sometimes, avoiding spending at other times trying to balance the ups and downs using a steady as it goes know when to interfere and when to stay out approach called mixed market economy.

Hey now stop complaioning. The biggest mistake your country made was not regulating your banks causing an absolute bank melt down while we next door in Canada limited the no. of our banls to 5 and demanded they always keep in reserve a certain amount of money you Yankee Doodles did not.

Other then that one difference come on, capitalists are capitalists. They try control prices to make profit, they try avoid taxes but they do hire people who then can get salaries and then spend creating a spin off effect. Capitalists are needed. If they don't run businesses your economy can not hire people to work and spend money. That causes the economy to slow down, supplies to dwindle and the price for that dwindling supply to sky rocket which is why oh trust me aint no way Kanye's gonna live in Moscow or Shanghai.

​

 

[American]

Who said we are not supposed to have a deficit?

You? Kanye West? To start with here is what I would tell Kanye and you:

1-the level of economic activity at the time you look at the deficit as well as the rate of inflation at the time you look at the deficit distort its actual meaning so I do not think you will hear any economist jump to conclusions about a government's fiscal performance simply looking at the deficit in any given point of time;

2-next if Kanye or you are in fact interested, when the economy of a nation under performs it doesn't take in revenue from taxes it needs to operate its government services so it borrows money and vice versa if its doing well and taxes are coming in it doesn't spend as much. Deficits increase when economies decline. Deficits then decrease when economies increase. Inflation however is a little more complex. It can be triggered by government expenditures when the economy is doing badly and governments spend to kick start the economy. Then as the economy gets better and the deficit decreases and government expenditures decrease, inflation doesn't magically stop. Business cycles can be complex as to supply and demand levels and you of course know if the demand for a product is higher than what is available up goes the price but if the supply is abundant but the demand is low down goes the price. The amount of supply can be kept artificially low to assure the demand is higher keeping prices high and that is what is happening now with gas and oil and you can thank OPEC for that.

3-Tell Kanye if the government is making proper adjustments for the ups and downs in its economic activities (which is a big if) it then might run what is called a more accurate measurement of debit the government owes called a structural deficit. So deficits constantly go up and down, so should supply and demand levels if you don't have monopolies.cartels like OPEC fixing prices.

The fact is all Western nations have chronic deficits. They always have and will always have. Its a basic feature of capitalism. The alternative is state run and controlled economies which in fact create a permanently depressed market that is fixed and under performs for its own citizens so that it can compete with capitalist economies.

Now see here is why I love you Americans. You don't understand basic economy. You panic when you hear the words recession, inflation, depression, deficit, government spending. You got no clue whether any of it is bad or good but you get spooked by all of it.

Trumpets are my favourite. They follow some fat scam artist who never balanced a budget and who made his money borrowing money to pay borrowed money and building up ponzi and pyramid scams and then declaring bankruptcy and then rebuilding the same scams. He's a genius to Trump cult followers even though he has no clue how to balance a budget let alone create a business that could last past a few years.

Then we have a guy like Biden who in essence is not that much different than Nixon, Bush, Carter, Bush Jr. The only thing anyone can really say is that unlike Reagan or Trump he rejects trickle down theory a belief that Reagan's cronies came up with that said let rich people avoid paying taxes and when you do that they will spend it on the economy instead. Of course they never did and there was no trickle down. Other then that one idiot theory pretty much every American politician does what every Western capitalist leader has done, go from cycle to cycle spending sometimes, avoiding spending at other times trying to balance the ups and downs using a steady as it goes know when to interfere and when to stay out approach called mixed market economy.

Hey now stop complaioning. The biggest mistake your country made was not regulating your banks causing an absolute bank melt down while we next door in Canada limited the no. of our banls to 5 and demanded they always keep in reserve a certain amount of money you Yankee Doodles did not.

Other then that one difference come on, capitalists are capitalists. They try control prices to make profit, they try avoid taxes but they do hire people who then can get salaries and then spend creating a spin off effect. Capitalists are needed. If they don't run businesses your economy can not hire people to work and spend money. That causes the economy to slow down, supplies to dwindle and the price for that dwindling supply to sky rocket which is why oh trust me aint no way Kanye's gonna live in Moscow or Shanghai.

​

I was actually listening to you until you went on your stupid Trump rant. We had enough of that for 5 years. You trotting out that shit, just kills everything your wrote. The highlighted part sounds like bullshit, and you haven't provided any substantiation for it. BTW there is no such thing as trickle-down economics, except in the minds of liberals.

 

[Ug make hammer]

The US as is the case with all countries with developed economies chose the route of kick-starting economies after Covid 19 by increasing government spending. It is a short term fix. Its like administering medicine. It has a serious side effect, inflation and the longer you take it the worse the side effect is. Because the US has the largest economy that kick started itself through government spending, the inflation has a different over all impact than other Western nations. Its hard to compare other than to say all of us in the West have rampant inflation but each country is a bit different. Inflation won;t go down until demand is less than supply which probably means about 1-2 years to get supply levels back up to where they once were. However the energy sector is another story.

The energy sector is not disrupted (still) by Covid? So it must all be down to Russia and the geopolitical need to sanction them for their aggression in Ukraine. But oil being so fungible this should not have a lasting effect: China will buy their oil at bargain prices, thus buying less from the middle east, it should all balance out. Maybe it's not so easy to get (more) oil from the Russian fields to Chinese refineries?

We all come down to addicts of fossil fuel and so OPEC can exploit our addiction by holding down supply levels. We also have to be realistic in that India and China directly compete now for the same energy as the West driving up prices and that direct competition did not exist to the same intensity 30 years ago.

I would say this to Americans. You are not immune to world economic conditions associated with disruptions in supply chains and that is because you chose to use cheap labour in other countries. The US like most of the West now is specializing its economy into computer soft and hardware and as always military technology. It means many Americans who are not being brought up computer literate become permanently underclass. Its a Western phenomena we see. Its not an excuse it is reality.

You want to get to the root of the problem ask yourself, why is the number one economic activity of the leading Western nations as well as China and Russia military related? Why? Why do we put all our energy into the development of weapons and then wait for the spin off to make its way to consumer products. Why? Imagine if you took just 25% of the manpower from the military industrial network and reapplied it to energy and agriculture.

Well we humans have not yet evolved past our pack animal behaviour. We still engage in pack behaviour. Our packs are larger but we still get led around by alpha males with inflammed butts (the more inflammed the more they are likely to lead-an actual fact of baboons and I would contend humans) and instead of sticks and rocks we now use missiles.

The irony is we are all living in banana republics so to speak.

This is very thoughtful and broadly I agree. I will say though, that development of weapons is a very healthy way for the US government to inject money into the economy, and this is so even if the weapons do not go to export (doubly so if they do.) The requirement of military secrecy means that not just the IP but a lot of the precursors of the hardware, have to be sourced in the US.

As far as hardware goes, the US has learned a good lesson from WW2, which is to be prepared for war even when enjoying the fruits of peace. But most of the US military budget does NOT go to hardware! It goes to wages and pensions. Then there's also the problem of needlessly getting involved in wars, which looks a whole lot like a deliberate strategy to test hardware and to extract money's worth from servicepeople. The US can't go a decade without getting into a fight, and it may well be deliberately sacrificing service people to harden the others up ... and keep softies out of the military.

In short, I don't disagree with military spending, but as much as possible should be towards weapons which require no courage and very little training to operate, and the US should abandon the idea that it is threatened in any serious way by dictators invading their neighbours. That's "fighting yesterday's wars" but it's not even yesterday, it's 40 years ago when the last serious rival bit the dust.

 

[Patriotic Voter]

The debt and the deficit are two different things. The debt can increase while the deficit is falling.

People need to learn the difference before they turn 18. Unfortunately, government teachers don't talk much about that.

 

[Ug make hammer]

People need to learn the difference before they turn 18.

Did you just pick a number at random, or are you trying to make a weak point about informed voters?

Unfortunately, government teachers don't talk much about that.

Being opposed to debt but in favor of deficits, is to be a hypocrite.
Being opposed to deficits but in favor of debt, is to wish for the impossible.

It's really in the narrow case of recessions and such emergencies, that it is important to distinguish debt from deficit. One can be opposed to excessive debt but still approve deficits for a year or two. That's an entirely practical position, and not at all hypocritical. It's close to my own position: not all spending has to be backed by tax revenue, but definitely more of it than in the post-Clinton era.

The number I wish people would pay more attention to is interest on debt. In 2022 it should be about $300 billion but to keep running deficits government will likely have to renew recent debt at higher interest rates (interest rates are going to rise) and then that part of the budget will look more like wasted money and less like an unpleasant part of the budget.

 

[Mika-El]

I agree with both of you. Certain kinds deficits are what we should be concerned about and how long they remain at certain levels we should be concerned about.. As for the exact amount of deficit and when it triggers more harm than good is the tricky question. You both from what I read get it. Neither of you is being extremist on deficits. I think we all agree the deficit itself is not automatically the problem. Its the amount in relation to other economic factors also transpiring at the same time, the length of time it remains at a certain level and many other complex market factors that make it problematic.

One thing we all know, if we look at all Western capitalist systems, the inherent nature of how market place transactions work in this system si that we have a pendelum back and forth between degrees of market intervention by governments. We have in fact mixed market regulations which sometimes get restrictive to correct market trends and sometimes pull back and become "laissez faire" to let markets set their own trends (price points).

No country is perfect in doing this and countries that trade with one another of course impact on one another's market places and economic conditions.

I appreciate some people are partisan and they believe their preferred leader's policies make the difference. I don't buy that because myself when I try learn from economists I don't read them analyzing economic trend by snap shotting a specific period of time and then concluding from that one moment in time, all the kinds of things I hear by partisans arguing in favour of their preferred politician. I keep hearing economists warning that when analyzing market places, the time period one chooses to perform analysis has a tremendous impact on the results one extrapolates from that time period.

So I appreciate economists try predict based on past events what might now happen in the future but at the best of times they can't be accurate and can only make educated guesses because the intrinsic nature of economic markets like anything else dependent on unstable variables is that they defy perfect analysis.

No one has an absolute take on the future. Certainly not economists. They try use specific formulas not simply speculate.

That all said when I see people piss on Biden but ignore what Trump did thinking the problems are specific to Biden, as someone outside the US when it comes to US economic performance I do not blame either Trump or Biden for certain things. I do argue Trump hid the severity of Covid 19 but I would also argue if one looks carefully he was a figure head. He delegated any actual authority and management of the economy away. He had no day to day clue what was going on with his economy. He was not a hands on leader he never read a briefing in his life. He didn't carry a conversation with anyone more than 10, 30 seconds.

The actual people in charge of the US economy have come and gone no matter who the President is making the key decisions while the President sits there as a face or puppet giving these unknown entities a human form.

I myself do not think the US economy suddenly changes when a Democrat comes into office or vice versa when a Republican does. That is a naive and simplistic understanding of how even if you do pass policies they can take years to have an effect often long after the government that passed them is out of office.

Also domestic economic policies may intend to do certain things, but external market events in the global markets as a whole intervene to often undue, impair, compromise those policies.

The classic example is oil prices. No President has a magic button to be able to control OPEC nation decisions as to how much oil they want to supply.

 

[mrjurrs]

People need to learn the difference before they turn 18. Unfortunately, government teachers don't talk much about that.

That's because it's in the Economics curriculum.