To his supporters, President Biden is doing a great job. To the rest of us, policies in his first four months in office have been a disaster in almost every area. And it looks like things will get worse.
His supports say he is doing exactly what he was elected to do. He pushed through legislation for a $1.9 trillion relief package. That stimulated the economy, provided additional aid to the millions of unemployed workers and bailed out some cities and states that were damaged financially by the virus. He promised to get the Trump vaccines administered to at least 100 million Americans within his first 100 days. He beat that goal.
Biden reversed Trump’s immigration policies and allowed hundreds of thousands of immigrants to escape persecution in their home country. He is focusing on equity and racial justice, believing that the US is a country with systematic racism.
Biden recognizes the importance of climate change and protecting the environment. As such he canceled the Keystone pipeline and stopped any drilling for fossil fuels on publicly owned land.
On national security, he has reversed the prior administration’s policies so the US can become less confrontational and more collaborative. Biden has begun negotiations to enter into a new arms deal with Iran. All of these are very favorable actions to Biden’s supporters.
For the rest of us, Biden’s most significant policies are simply disastrous. On the economy, immigration and foreign policy, Biden’s policies are a complete failure.
When Biden entered office the economy was in the midst of a V-shaped recovery from the deep, but short-lived recession in the Spring of 2020. GDP grew at a 33% annual rate in the third quarter of 2020, 4% in the fourth quarter of 2020 and was growing at 6.4% in the quarter when Biden was sworn into office.
At that point, no additional stimulus was needed. Yet Biden pushed through a $1.9 trillion package that will prove to be inflationary, not to mention that it will drive the deficit to at least $3.5 trillion for fiscal 2021, which is also inflationary.
The huge deficit will increase the public debt to more than $30 trillion. This will eventually lead to a capital shortage meaning with the federal government removing that much capital from the market, there may not be enough capital available to business for expansion.
That will lead to more inflation and tend to stagnate growth. Already inflation is about 6% since January. The price of gasoline has increased by about 30% since Biden became president.
Making the potential capital shortage worse, is the Biden tax plan. He wants to raise the corporate tax rate from 21% to 28%. He also wants to raise the capital gains tax rate from 23.8% to more than 40%. And he wants to raise the top tax bracket from 37% to 39.6%. All of those actions will reduce capital formation making the capital shortage worse.
Without sufficient capital available to business, the economy will stagnate and prices will rise. That leads to Stagflation, which the US has not seen in four decades.
After years of seeing hundreds of thousands of illegal immigrants entering the US through our southern border, the Trump Administration built a wall and instituted policies to reduce the flow of illegal immigrants. Biden stopped building the wall and reversed the Trump policies. The result is a massive illegal immigration problem.
In the area of foreign policy, when Biden entered office, Iran was crippled by Trump’s sanctions. That meant they had little funds to finance terrorism. Biden, however, did not enforce the sanctions. Iran began selling oil right after the election. They have received a large increase in revenue which allowed them to start financing terrorism again. Hamas and Hezbollah are now very active.
Trump had negotiated five peace agreements in the Middle East. There was little military action in any Middle Eastern country. Today conflicts among those countries have escalated to the point where Israel and Hamas had gotten into a nearly full-scale war.
Biden has turned away from the very successful “peace through strength” policy of the Trump Administration. Instead, Biden has returned to the Obama “turn the other cheek” philosophy. This has emboldened Russia, China and North Korea. Conflicts are increasing as our adversaries become embolden.
Perhaps Biden has improved the perception of social justice and equity. But the price Americans are paying for massive illegal immigration, high inflation, higher taxes and a less safe world, is far too high.
Biden’s first four months have been good for lower-income earners who feel an injustice. For the rest of us, his policies are a disaster.