{"id":375082,"date":"2025-12-29T12:27:09","date_gmt":"2025-12-29T12:27:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/375082\/"},"modified":"2025-12-29T12:27:09","modified_gmt":"2025-12-29T12:27:09","slug":"trump-suddenly-sounds-a-lot-like-biden-on-the-economy","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/375082\/","title":{"rendered":"Trump suddenly sounds a lot like Biden on the economy"},"content":{"rendered":"

\n President Donald Trump never misses an opportunity to criticize his predecessor about the economy, alleging former President Joe Biden caused an inflation crisis. But some of Trump\u2019s economic proposals are starting to sound a lot like Biden\u2019s.\n <\/p>\n

\n At the start of Biden\u2019s presidency, the unemployment rate remained high, but the overall economy was growing at a fast pace, bouncing back from the pandemic. Biden and the Democratic-controlled Congress passed a nearly $2 trillion stimulus package that included $1,400 direct checks to taxpayers just a year after Trump signed a previous stimulus bill and the Federal Reserve knocked rates to zero to boost growth.\n <\/p>\n

\n Democrats largely ignored concerns from critics that all that stimulus could send prices soaring. It was far from the only factor, but those warnings came true: Inflation reached a four-decade high in 2022.\n <\/p>\n

\"President<\/p>\n

\n Trump now finds himself with very different economic circumstances than Biden. Affordability is the No. 1 problem<\/a> of the day, and interest rates are significantly higher now. But there are similarities between the early Biden and Trump economies, including a weak job market combined with strong overall economic growth. The Commerce Department reported Tuesday that America\u2019s gross domestic product grew at a 4.3% annualized rate<\/a> in the summer, the fastest pace in two years.\n <\/p>\n

\n So that should give Trump some pause about his proposal to juice the strong economy with stimulus, including $2,000 checks<\/a>, combined with his latest push for low interest rates. Those are the same choices that he and other Biden critics say fueled the inflation crisis.\n <\/p>\n

\n Trump last week posted a long message on social media<\/a> that he dubbed \u201cThe Trump Rule.\u201d He said the Fed, led by a new chair he plans to nominate soon, should lower interest rates to help keep the stock market and economy humming \u2013 even at the risk of stimulating inflation.\n <\/p>\n

\n \u201cI want my new Fed Chairman to lower Interest Rates if the Market is doing well, not destroy the Market for no reason whatsoever,\u201d Trump posted.\n <\/p>\n

\n Trump claimed that a strong stock market could boost economic growth by up to 20% a year. That\u2019s classic Trump hyperbole \u2013 the US economy has never grown by even 9% in a single year, and the fastest growth of the past four decades took place in 2021 \u2013 Biden\u2019s first term \u2013 when the economy bounced back from the pandemic to surge 6.1%.\n <\/p>\n

\"Traders<\/p>\n

\n That\u2019s also not how the economy works: The stock market itself doesn\u2019t contribute much to economic growth \u2013 it boosts wealthier Americans\u2019 net worth, but the market is more a reflection of investors\u2019 predictions about where the economy is headed than an economic engine in its own right.\n <\/p>\n

\n But Trump\u2019s general sentiment is correct: The Fed tends to raise rates when the economy is getting overheated and lower rates when it is slowing down. Doing the opposite \u2013 lowering rates when the economy is growing fast \u2013 could boost economic growth even more.\n <\/p>\n

\n And one symptom of a too-hot economy is inflation. That\u2019s the main reason the Fed doesn\u2019t operate in the way Trump describes.\n <\/p>\n

\n The laws of supply and demand explain why Trump\u2019s economic proposals could be inflationary: Handing out $2,000 checks would stimulate demand without adding to the supply.\n <\/p>\n

\n If you studied Econ 101, you\u2019ll know that this is a recipe for higher prices. When people have more disposable income, they tend to spend it. If suppliers don\u2019t adjust to increased demand, that will create a scarcity of certain items that will increase their value and lead to higher prices for shoppers.\n <\/p>\n

\"A<\/p>\n

\n Installing a Fed chair who will champion lower rates could also push inflation higher, if the Fed\u2019s rate-setting committee follows the new chair\u2019s guidance. Lower interest rates can reduce businesses\u2019 borrowing costs, giving companies more capital to spend. Like consumers, corporations can ignite a supply\/demand imbalance, too \u2013 and prices can rise along with it.\n <\/p>\n

\n The Fed was widely criticized for keeping rates low for too long, responding late to the inflation crisis. Fed Chair Jerome Powell had called inflation \u201ctransitory,\u201d arguing that higher prices did not need a quick response from the Fed \u2013 a decision he later said was a mistake.\n <\/p>\n

\n Now, Trump is advocating for a repeat of the Biden years: low rates, strong growth, and extra cash in Americans\u2019 pockets.\n <\/p>\n

\n But Trump has introduced a complicating factor that Biden didn\u2019t have to deal with: historic tariffs that are keeping prices elevated.\n <\/p>\n

\n Tariffs haven\u2019t caused the kind of runaway inflation that economists had warned about earlier this year. But Powell said this month that the tariffs are solely responsible for inflation that has remained above the Fed\u2019s 2% long-term target. US consumer prices in November rose 2.7%<\/a> over the past 12 months.\n <\/p>\n

\n Trump acknowledged that lower rates and stimulus might cause a problem down the road: He said last week if inflation becomes a concern because of the policies he\u2019s pushing for, the Fed can raise rates \u201cat the appropriate time.\u201d\n <\/p>\n

\n But he said that time isn\u2019t now. In the meantime, the Fed should push for more growth, Trump said.\n <\/p>\n

\n \u201cThe United States should be rewarded for SUCCESS, not brought down by it,\u201d Trump wrote. \u201cAnybody that disagrees with me will never be the Fed Chairman!\u201d\n <\/p>\n

\n Trump may ultimately get what he wants. The Fed is widely expected to hold rates steady until the middle of 2026 in order to support a flailing labor market. But if the job market continues to weaken, the Fed may have no choice but to cut rates \u2013 even at the risk of higher prices.\n <\/p>\n","protected":false},"excerpt":{"rendered":"President Donald Trump never misses an opportunity to criticize his predecessor about the economy, alleging former President Joe…\n","protected":false},"author":2,"featured_media":375083,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[45,49,48,46],"class_list":{"0":"post-375082","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-ca","10":"tag-canada","11":"tag-economy"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/375082","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=375082"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/375082\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/375083"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=375082"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=375082"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=375082"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}