Category Archives: Biden

The Historical Puzzle of US Economic Performance under Democrats vs. Republicans

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March 28, 2024 — We have heard much about the puzzle that US economic performance under President Joe Biden has been much stronger than voters perceive it to be.  But the current episode is just one instance of a bigger historical puzzle:  the US economy has since World War II consistently done better under Democratic presidents than under Republican presidents.  This fact is even less widely known, including among Democratic voters, than the truth about Biden’s term.  Indeed, some poll results suggest that more Americans believe the reverse, that Republican presidents are better stewards of the economy than Democrats. read more

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Six Explanations for Misperceptions Regarding the Strong Economy

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February 25, 2024 — By now, quite a variety of explanations have been offered for the puzzle that the unusually good state of the US economy has not been reflected in public opinion surveys, and especially not in polls regarding President Joe Biden’s bid for re-election in November.  At least six hypotheses have been put forward regarding the performance-perception gap.

Perception biases

  1. Some charge that the official statistics must be wrong, out-of-touch, failing to capture the true state of the economy. This hypothesis is itself wrong.  While any given number is subject to measurement error, the evidence from a wide variety of statistics, most of them gathered separately, has been overwhelming.  They tell a very positive story, whether one looks at the measures of economic growth (GDP), strength in the labor market (jobs created or unemployment), or inflation (either CPI or PCE, and either headline or core).

Media commentary over the last two years has emphasized that the economy and job market have been slowing down.  They usually fail to note that, although this is true relative to the breakneck growth of the year that immediately followed the 2020  pandemic shutdown, the current rates of expansion of GDP and employment are above their post-2000 averages. read more

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Crashing Through the Debt Ceiling

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January 31, 2023 — The US federal debt hit its legal limit, $31.4 trillion, on Thursday, January 19, 2023.  Everyone feels that they have seen this movie before: there is no need for alarm because the politicians will strike a deal at the last moment.  But this time, the movie could well end tragically, as a result of the intransigence of Republicans in Congress.  It is likely that they will refuse to raise the debt ceiling until after they have driven the car over the cliff.  This could mean a once unthinkable default by the US government.  Unfortunately, letting them do that may be the best strategy available to President Joe Biden when the time comes. read more

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