The Continuing Unreality of Bidenomics
By James Freeman June 9, 2023 4:35 pm ET President Joe Biden speaks at Nash Community College in Rocky Mount, N.C., Friday, June 9, 2023. (AP Photo/Susan Walsh) Photo: Susan Walsh/Associated Press A distinctive feature of Joe Biden’s presidency is the frequency with which his economic claims are rebutted by the government’s own statistics. One can find this disturbing or amusing—or perhaps both if one is determined to carry a good mood into the weekend while remaining clear-eyed about the country’s challenges. Today in a Journal op-ed President Joe Biden follows up on a piece from last year in which he pretended to be the author of an economic rebound who took office amid a “stalled” recovery. Yet Mr. Biden’s own Commerce Department affirms that
President Joe Biden speaks at Nash Community College in Rocky Mount, N.C., Friday, June 9, 2023. (AP Photo/Susan Walsh)
Photo: Susan Walsh/Associated Press
A distinctive feature of Joe Biden’s presidency is the frequency with which his economic claims are rebutted by the government’s own statistics. One can find this disturbing or amusing—or perhaps both if one is determined to carry a good mood into the weekend while remaining clear-eyed about the country’s challenges.
Today in a Journal op-ed President Joe Biden follows up on a piece from last year in which he pretended to be the author of an economic rebound who took office amid a “stalled” recovery. Yet Mr. Biden’s own Commerce Department affirms that the U.S. economy was growing faster during the quarter he took office than it has in the two years since.
Mr. Biden is also once again posing as a deficit fighter, but this week’s monthly update from the Congressional Budget Office exposes this canard. CBO reports on the historic fiscal recklessness of the Biden era:
The federal budget deficit was $1.2 trillion in the first eight months of fiscal year 2023, the Congressional Budget Office estimates—$735 billion more than the shortfall recorded during the same period last year. Revenues were 11 percent lower and outlays were 9 percent higher from October through May than they were during the same period in fiscal year 2022.
As ugly as this portrait of political irresponsibility is, CBO helpfully notes that it would actually be even worse if not for a quirk of the calendar:
Outlays this fiscal year were reduced by the shifting of certain payments—totaling $63 billion—from October 1, 2022 (the first day of fiscal year 2023), into fiscal year 2022 because October 1 fell on a weekend. If not for those timing shifts, the deficit in the first eight months of fiscal year 2023 would have been larger...
CBO is now projecting a whopping federal budget deficit of $1.5 trillion for 2023. This staggering number is not just because of surging costs from the entitlement programs that Mr. Biden refuses to reform—though they are certainly a big part of the reason. CBO explains the rising damage in the first eight months of this fiscal year as entitlements grow much faster than the economy:
Mr. Biden’s fingerprints are all over the other sources of fiscal pain, including the inflation that has in turn led to higher interest rates and therefore more expensive government financing. CBO notes:
Net outlays for interest on the public debt rose by $112 billion (or 34 percent), mainly because interest rates are significantly higher than they were in the first eight months of fiscal year 2022.
And remember those bailouts of uninsured bank depositors? CBO reports:
Outlays of the Federal Deposit Insurance Corporation (FDIC) rose by $53 billion as a result of facilitating the resolution of bank failures in the spring of 2023. The FDIC expects to recover much of that amount by continuing to liquidate the banks’ assets and collecting higher premiums from FDIC-insured institutions over the next several years.
So a tax on everyone who uses the banking system will fund the effort to keep Silicon Valley venture capitalists whole. Speaking of Biden outrages, CBO also notes:
Anyone inclined to forgive the president for these abuses may reconsider after learning about the response of his congressional allies to this fiscal disaster. Instead of accepting the mathematical reality that spending reform is necessary, they’ve decided to embark on a political venture to ensure that no leverage for spending restraint is allowed to exist at all.
The Journal’s Lindsay Wise reports:
Democrats in the House and Senate plan to introduce a bill Friday that would overhaul the debt-ceiling process, eager to capitalize on widespread anxiety in the party regarding the regular brinkmanship over the country’s borrowing limit.
Backers argue that using the full faith and credit of the U.S. as leverage is irresponsible and tantamount to taking the U.S. economy hostage. But many Republicans in Congress see the debt limit as a pressure point that can be used to extract concessions from Democrats on spending.
The Debt Ceiling Reform Act would reverse the current power dynamic between the White House and Capitol Hill. It would empower the Treasury Department to continue paying bills for the country’s existing obligations. To stop Treasury’s payments, Congress would have 30 days to pass a veto-proof joint disapproval resolution, which would require a two-thirds vote in the House and Senate.
The premise of this bill is that it’s simply been too hard for the president to increase federal spending and borrowing.
The president and his friends can continue to insist on political and rhetorical unreality. But eventually math is going to intrude.
***
James Freeman is the co-author of “Borrowed Time: Two Centuries of Booms, Busts and Bailouts at Citi” and also the co-author of “The Cost: Trump, China and American Revival.”
***
Follow James Freeman on Twitter.
Subscribe to the Best of the Web email.
To suggest items, please email [email protected].
(Lisa Rossi helps compile Best of the Web.)
***
What's Your Reaction?
