WASHINGTON
President Joe Biden and his economic policies will be remembered for the growth they brought to the nation and the intense battle against inflation.
After addressing the post-coronavirus pandemic recovery, Biden’s administration pushed infrastructural and clean energy investments as the US experienced historically low unemployment rates.
During Biden's four-year term, his administration made notable strides in fighting inflation following the pandemic.
As voters cast ballots Tuesday to re-elect Donald Trump, however, concerns about high living costs under Biden overshadowed economic progress.
Despite policies contributing to growth and employment, public discontent centered on the administration’s large-scale spending, which increased public debt.
Biden’s first major decision came as he took office Jan. 20, 2021, succeeding Trump amid a pandemic-induced recession.
Biden approved the American Rescue Plan Act, a $1.9 trillion stimulus package designed to combat pandemic effects through public health and economic recovery measures.
It faced criticism for contributing to short-term inflationary pressures.
The administration later passed a $1.2 trillion infrastructure package to boost employment through projects related to roads, bridges, internet connectivity and other public infrastructure.
Inflation, fueled by pandemic disruptions, became Biden’s most criticized issue as the economy reopened. Monetary incentives following the easing of pandemic restrictions drove US inflation from 1.4% in January 2021, when Biden took office, to 9% by June 2022 -- the highest since 1981. Though initially downplaying the surge as temporary, the White House and the Fed prioritized inflation control after acknowledging their miscalculation.
Russia’s war in Ukraine complicated the fight, leading to higher energy prices while stimulus efforts struggled to curb inflation.
This September, the Fed eased its tight monetary policy, having raised rates since March 2022 as annual inflation slowed to 2.4% two months ago.
On climate and clean energy, the administration introduced the Inflation Reduction Act (IRA) in 2022, the country’s most ambitious climate package.
The bill covers health, climate and tax regulations to reduce inflation, lower greenhouse emissions and support green energy and electric vehicles. Republicans and the fossil fuel industry criticized the policies amid rising energy costs.
In 2022, Biden also signed the CHIPS and Science Act to address chip shortages affecting automobiles and electronics during the pandemic.
The act, appropriating $52.7 billion, aims to boost US semiconductor production to compete with China.
As for employment, the administration oversaw the US unemployment rate as it reached a 50-year low of 3.4% in 2023.
The pandemic led to a peak unemployment rate of 14.8% in April 2020 -- the highest since the Great Depression. When Biden took office, it was at 6.4% and soon dropped below 6% by May 2001.
Despite the Fed’s rate hikes to cool the overheated economy, the labor market showed resilience, although it began to cool as interest rates hit a 23-year high.
September's labor statistics showed a US unemployment rate of 4.1%.
Economic growth endures
The pandemic sparked a global economic downturn, contracting economies worldwide. The US economy shrank 2.2% in 2020 but rebounded with 6.1% growth in 2021 under Biden.
Growth then slowed to 2.5% in 2022 as the Fed’s rate hikes took effect, and hit 2.9% last year.
The US economy grew 1.6% in the first quarter of 2024, 3% in the second and 2.8% in the third, despite a loss of momentum in 2022.
Public debt, however, reached $35.8 trillion under Biden, with Republicans criticizing the administration’s spending. High interest rates have further complicated debt management.
The US posted its second-largest budget deficit of $2.8 trillion in fiscal year 2021, following a $3.1 trillion deficit in 2020 under Trump.
In fiscal year 2022, the deficit fell to $1.4 trillion but rose to $1.7 trillion the following year, reaching $1.8 trillion in fiscal year 2024.
*Writing by Emir Yildirim in Istanbul
