Five Signs Biden’s Economic Policies Have Been a Disaster

 

Young Americans today are experiencing a replay of the economic problems that their parents and grandparents experienced in the 1970s: Stagflation.  Stagflation is the combination of tepid economic growth and rapidly rising prices. 

Both low growth and high inflation are a direct result of the policies of the Biden Administration.

Biden’s high tax and oppressive regulatory policies have throttled economic activity. 

At the same time, his massive spending programs and deficits have showered special interests with cash. 

The result: negligible economic growth, diminished employment opportunities, rising prices and high interest rates. 

Here’s five pieces of evidence that demonstrate that Joe Biden’s economic policies have hurt young  Americans 

1. Small business confidence at lowest level in 11 years.

Young people are more likely to work at smaller firms than are older workers.  The National Federation of Independent Business survey shows that small business owners are more pessimistic than at any time since 2013.  That includes the pandemic years where many small businesses failed during the shutdowns.  Also note how small business confidence soared during the Trump years. 

 

2. No full-time jobs have been created in the past 14 months

Job opportunities are particularly important for new graduates and younger workers looking to switch jobs.  The number of full-time jobs in the United States is same as 14 months ago and the number of full-time jobs has crashed in the last six months according to the Bureau of Labor Statistics.

 

 

3. No signs of a Federal Reserve rate cut

High interest rates make it difficult for young people to buy a home,.  The average rate on a 30-year home mortgage is over 7.5 percent.  Expectations for a rate cut in 2024 have evaporated as investors no longer view the federal Reserve as able to bring inflation under control.  According to Reuters:

“Expectations for how deeply and how soon the Fed will cut rates have shifted rapidly over the last few months, as investors grow increasingly doubtful that policymakers will be able to lower borrowing costs without sparking an inflationary rebound in a strong economy. The Fed has projected it will cut rates by 75 basis points this year.”

4. Food prices have risen by almost 40 percent since 2019.

Food is a larger share of total spending by lower income and younger households.  The increase in food prices has far outstripped wage growth.  Have your earnings increased by 40 percent since 2019?

 

5. More Americans see their financial situation getting worse

or the first time since the Federal Reserve began collecting data in 2014, a majority of Americans see their personal financial situation as worse than the previous year.  This again is a stark contrast to the Trump years in which Americans saw their situation getting better each year. 

 

Bonus: the 2020s are so bad that Americans now long for the 1970s!

 

#Bidenomicsfail: Just 1 in 3 Gen Zs Say They Can Handle a $400 Emergency Expense

 

Joe Biden wants us to think that the economy is doing great.  In fact, the Biden economy has large numbers of Americans living on the edge. 

Morning Consult survey found that only 32 percent of Gen Z report that they could pay for an unanticipated emergency expense with cash.  Just two quarters ago, 39 percent of Gen Z could handle a $400 emergency expense. 

The normal pattern of saving over one’s lifetime is that as one ages holdings of financial assets should grow as one saves for retirement. 

However, the Morning Consult survey shows that Millennials and Gen X are making very little progress in building wealth.  

The survey found that only 36 percent of Millennials and 41 percent of Gen X said that they could handle an unanticipated $400 expense.  These percentages are not materially different from Gen Z. 

Seen differently, Gen Xers are now more than twenty years into their adult lives and their finances are not much more stable than the finances of new college graduates. 

 

The survey also asked whether the $400 expense would require putting off payment of other bills.  38 percent of Gen Z and 39 percent of Millennials and Gen X would have to put off payment of other bills. 

It’s not just Americans.  A video posed by TikTok user Simone (@simonesdays) shows how after paying taxes and bills, the paycheck from her CAD75,000 corporate job leaves her with exactly in $80 spending money for the next two weeks. 

Her TikTok video has been viewed 2.7 million times and has 184,000 likes as of Friday the 4th. 

Here are some of the comments on her TikTok page from other young people struggling to get by. 

At the core of the financial struggles of young A

mericans is a lack of economic opportunity.  The inability of the Millennials and Gen X to improve their finances so that they are closer to the Baby Boomers than Gen Z is particularly concerning.

Biden Medicare Plan Fleeces the Young

Biden’s Medicare plans look like they came straight out of the playbook of the AARP.  His plans demonstrate that the Democratic Party doesn’t care about young Americans. 

On Tuesday (March 7) President Biden announced his plan to save Medicare.  His plan disinherits the young: it sacrifices the interests of young Americans to benefit the old.  That may be good politics.  Young people have little political power in America.  But it’s bad for the future of our country.

Here’s a quick roundup of three ways that Biden’s plans harm young Americans:

First, Medicare is going bankrupt because it provides the elderly with benefits that cost far more than the amount of taxes that they out into the system.  But Biden wants to make Medicare even more generous and thus more costly to younger taxpayers.

Biden wants to reduce the age of eligibility from 65 to 60.  That means that millions more will become eligible for government benefits.  That costs the system in two ways.  First, more people will be part of the program which means benefit costs go up.  Second, Medicare and Social Security payroll tax revenues are going to go down since people will take advantage of the benefits by retiring earlier. 

The responsible thing is to raise the age of eligibility from 65 to 70.  The average life expectancy of Americans has increase by 9 years since Medicare started in 1966 so retirees in America are already collecting benefits far longer than originally intended.  Reducing the age to 60 means that the average retiree would get 25 years of taxpayer subsidized health care.

Second, Biden wants to hike taxes on Americans earning more than $400,000 a year.  Currently, Americans in this range already pay an extra 3.8 percent on top of the existing federal income tax rate of 37 percent.  Biden wants to increase the rate to 5 percent which means that the top federal rate is now 42 percent.  Then add state taxes on top of that.  So high earners in California are going to be taxed at the astounding rate of 55 percent (47 percent in Massachusetts, 50 percent in Wisconsin).

High taxes reduce economic activity.  Hiking taxes on the most productive, hard working and entrepreneurial Americans will only these people to do three things: (a) become less productive; (ii) not work as hard; and (iii) be less entrepreneurial.  The result: slower growth and fewer career opportunities for young Americans in a stagnant economy.     

Third, Biden wants to force down process for prescription drugs.  That sounds good in the present.  But lower prices mean less incentive for the development of new drug treatments.   Economists Tomas Philipson and Troy Durie of the University of Chicago estimate that price controls for prescription drugs would lead to a 29 to 60 percent decline in the number of new drug treatments brought to market by 2039.  As a result, Millennials and Gen Z will have fewer treatments available when they need them in later life.

It true that Medicare is going bankrupt.  But is it doing so because of political myopia and the craven desire of Washington politicians to channel benefits to the politically influential (the elderly) while stock the costs to the politically weak (the young).

What America needs is statemen that think of the next generation, not politicians like Biden that only think of the next election.

A statesman would acknowledge that life expectancy has increased dramatically since the program began.  Therefore, rather than lowering the age of eligibility to 60, a statesman would raise it to 70.

A statesman would recognize that Medicare is a very good deal for current retirees.  Economists C. Eugene Steuerle and Karen Smith estimate the even high earnings individuals are getting more out of the program in terms of benefits than they paid in in taxes.  It shouldn’t be too much to ask the elderly to pay a little more in premiums to support the program.

Unfortunately for young Americans, statesmen are in short supply.  Washington is full of politicians.  And that’s why you are routinely fleeced by the likes of Joe Biden. 

 

Nearly Half of Millennials and Gen Z Struggling to Make Ends Meet in the Biden Economy

 A new survey of the financial condition of Americans shows that nearly one in two Millennials and Gen Zers report that they regularly run out of money.  And this is before the likely recession in 2023.

Janet Yellen might not see signs that Americans are hurting but a new survey of personal financial conditions tells a different story. 

Prudential Financial’s most recent Pulse Survey found that 49 percent of Millennials and 40 percent of Gen Zers report that they regularly run out of money and have to rely on credit cards or parents for financial support. 

The survey also found that 46 percent of Gen Z and 42 percent of Millennials say that they would not be able to support their current lifestyle without parental support.

Financial difficulties are a major source of stress for young Americans. Half of the Millennials surveyed reported that they had trouble sleeping during the past year because of financial stress. 

The financial difficulties facing the Millennial generation are particularly concerning because most Millennials should be well into their careers at this point.

The Millennial generation is typically defined to include those born in 1981 through 1996.  The youngest Millennials are 26 and the oldest 43. 

That so many young Americans are struggling financially underscores the weakness of the Biden economy.

And this is before the much-anticipated recession of 2023.

Young Voters Overwhelmingly Disapprove of Biden. Will the GOP Seize This Opportunity?

 

A new poll by CIVIQS provides more evidence that younger voters are turned off top Joe Biden.  Will young voters register their disapproval of the Biden Administration in November?

I blogged a few days ago about polling data that showed younger voters turned off to Joe Biden and willing to look toward the GOP on important issues including on jobs and the economy.

The openness of young people to the GOP message could make the 2022 election a watershed moment in American politics. 

During the past twenty years, majorities of younger voters have favored the Democratic Party while older voters have favored the Republican Party.  Younger voters have been critical to the success of Democrats at all levels of government. 

Now large numbers of young people have been turned off by the incompetence of the Biden Administration.

CIVIQS surveyed over 160,000 registered voters on their views of Joe Biden’s performance as president. 

Their survey shows that generational differential in approval have disappeared. 

A mere 26 percent of Americans under the age of 35 approved of Joe Biden’s handling of his job as president.  Approval among younger voters was lower than the 34 percent approval rate for Biden among all voters. 

Biden’s approval numbers are underwater is most major demographic groups.  His approval levels are equally dismal among both highly educated young people and non-college graduates and among and men as well as women. 

Most telling, only a slim majority—51 percent--young people that describe themselves as Democrats approve of the job that Biden has done as president and a mere 42 percent of young Blacks approve of Biden’s handling of his job.

Young Americans are clearly dissatisfied with the left-wing Biden agenda and are looking for a change.

Will the Republican Party be able to craft a 2022 message that appeal to young people.  If so, 2022 could be a watershed year.  If not, then .... 

Biden Tanks With Generation Z and Millennials

Young people were pivotal to the election of Biden in the 2020 election.  Now young Americans have become so dissatisfied with the Biden Administration that his approval levels among the young is at or above that of older voters.

If only voters over the age of 40 voted in the 2020 election, Donald Trump would have won in a landslide and the Republicans would have massive majorities in the House and Senate.

Now young Americans are turning on Biden. 

A January 2022 poll by CBS News and YouGov shows the depth of the dissatisfaction of young Americans with the performance of the Biden Administration.  It’s so bad that disapproval rates among young people are at the same level as older Americans

Results appear below:

Biden’s 42 percent approval rate among Generation Z is no different that the 40-44 percent among Americans over the age of 45.

And Biden’s approval rate for his handling of the economy among Generation Z is more than 10 points lower than Americans over age 45. 

In some ways this is little surprise.  Young people who are just starting their careers are feeling the effect of slow job growth.  The U.S. economy currently has 4 million fewer jobs today than in 2019 and many of those missing jobs would have been filled by young people.

Moreover, the Biden Administration offers little reason for hope among the young.

Their paychecks are being eaten away by the inflationary policies of the Biden Administration.

And young people should be bedeviled by the fear that they are the ones that will be stuck with the bill for Biden’s massive deficits and spending programs that benefit mostly special interests.

Does this portend a permanent change in the voting preference of young people?  Perhaps.  

 

Engine of Generational Inequality

The Mises Institute has a great post on how QE has driven up wealth inequality in America.  Read the whole thing! And buy Katherine Petrou's book (you don't need to get it from Amazon either--you don't need to deal with oligopolists). 

While the QE discussion is framed as one that benefits the wealthy at the expense of everyone else there is another dimension which I have been blogging about.  Ultralow interest rates benefit asset owners most of whom are baby boomers and older.  On the other hand, low rates hurt asset purchasers who have to buy into overvalued markets or save at rates that are below inflation--negative interest rates.  Asset purchasers and savers are mainly young people who0 are looking to accumulate some wealth in the economy.  By pulling assets returns forward QE reduces the returns earned by asset purchasers and increases their exposure to downside risk.

The most recent chatter from the Federal Reserve is that they could maybe, possibly start reducing QE by the end of the year.  This is way too late.  By historical measures assets prices are way overinflated. The Fed's own financial stability report warns of heightened risks from declines in asset prices.  

I would rate the possibility that the Fed reduces QE in the next two years as slim to none.  Biden's deficits means that Treasury needs to find a lot of places to stuff Uncle Sam's paper.  Most of that for the past two years has been put on the Fed's balance sheet.  Look for that to continue as spending and deficits continue to swell.       

College Students Say Biden Has Failed

 

Buyers remorse sets in on campus: Students Disown Joe Biden After Endless 'Disaster'