Beneath the blather and accusations at the primary 2024 presidential debate, money took center stage Thursday in Atlanta. President Joe Biden and former President Donald Trump faced off on topics including but not limited to Social Security, taxes, the price of kid care, housing affordability, inflation, jobs, tariffs, the value of eggs, Pell Grants, and more.
(Whew.) (It was a protracted 90 minutes.)
The 2024 election is unprecedented in some ways. It encompasses a rematch of the 2 oldest major presidential candidates ever, considered one of whom is a convicted felon still facing three other criminal cases, and one other whose debate performance was so shaky lots of his supporters are hoping he’ll bow out of the race.
The election also comes at a wierd time for the economy. Though the pandemic is generally within the rearview, inflation remains to be running hotter than the Federal Reserve would really like. The stock market is booming and unemployment is at historic a low, however the vibes are off: A recent survey found that 56% of Americans think the US is in a recession — it’s not.
In consequence, pocketbook issues are a significant focus for voters and candidates alike heading into November. It may be hard to maintain up with who said what and which claims are true, so we’ve put together a fast roundup and evaluation of remarks from Trump and Biden’s first 2024 debate.
Here’s a fact-check of 4 big money topics that would affect your wallet:
Inflation
- Trump said “inflation’s killing our country” and in addition suggested that food prices have “doubled, tripled and quadrupled.”
- Biden said “if Trump is re-elected, we’re prone to have a recession, and inflation goes to increasingly go up.”
The primary query of the talk centered on inflation and the pain felt by consumers, putting Biden on defense. He blamed “corporate greed” and the economic conditions he inherited from Trump.
Nonetheless, as Trump noted, the annual inflation rate was low when Biden took office — 1.4% in January 2021 per the patron price index measure. Inflation peaked at 9.1% in June 2022, and it’s back right down to 3.4%. Trump, for his part, exaggerated how bad inflation has been. Food prices, for instance, haven’t doubled, let alone quadrupled: They’re up about 23% over the past 4 years.
While it’s true that inflation has soared during Biden’s presidency, global economic conditions and central bank policy have a greater impact on inflation than the actions of any particular country’s leader. Also, Inflation is hardly an issue limited to the U.S.: Globally, headline inflation rose above 9% in 2022, in line with the International Monetary Fund.
Later in the talk, Trump said inflation “blew up under [Biden’s] leadership because they spent money like a bunch of people who didn’t know what they were doing.” While government spending likely contributed to inflation, it’s essential to notice that each presidents advanced stimulus relief in response to the pandemic. Biden has approved $4.3 trillion of latest 10-year borrowing to date in his presidency, which is barely about half as much as Trump approved ($8.4 trillion) in his 4 years.
Will inflation climb if Trump gets one other term? Possibly.
Biden’s claim is predicated on a letter signed Tuesday by 16 Nobel Prize winners who’re concerned concerning the economic consequences of one other Trump administration. They fear that Trump’s “fiscally irresponsible budgets” will reignite inflation. Economists also say that a Trump proposal to impose a ten% blanket tariff on imports would result in higher prices. But overall it’s unimaginable to predict with any certainty where inflation is headed in the following 4 years.
The economy
- Biden said “now we have the fastest-growing economy on the earth” and claimed “the economy was flat on its back” when he became president.
- Trump said “we had the best economy within the history of our country” during his presidency.
Economists often judge the strength of the economy under a president the expansion of real gross domestic product (GDP). Real GDP growth ranged from 2.5% to three% during Trump’s first three years in office, before decreasing to -2.2% in 2020. Real GDP growth has been stronger under Biden, but that features 5.8% growth in 2021, which was a recovery yr.
On the economy, Trump also touted the stock market’s performance during his presidency. Nonetheless, the S&P 500’s growth under Biden is at 43%, in comparison with 35% for a similar period of Trump’s time in office.
Biden and Trump went backwards and forwards throughout the talk on jobs, with Biden stating that the unemployment rate peaked at 15% under Trump. His point lacked the context that unemployment spiked to that level in April 2020 at the peak of the COVID-19 shutdown.
Trump countered that “the one jobs [Biden] created are for illegal immigrants and bounce-back jobs, they’re bounced back from the COVID.” In point of fact, the strength of the labor market has been impressive under Biden, with jobs numbers routinely exceeding expectations despite forecasts of a recession. In May, the unemployment rate was only 4%, which is taken into account full employment. One reason the Federal Reserve has been cautious regarding rate of interest cuts is because job growth has been so strong, as has the U.S. economy typically.
Taxes
- Trump said he led Congress to pass “the most important tax cut in history,” boasting that “no one ever cut taxes like us” and saying Biden “wants to boost everybody’s taxes by 4 times.”
- Biden said “now we have to ensure that that now we have a good tax system,” repeating his claim that no one who makes under $400,000 “had a single penny increase of their taxes” — which can “be the case again” if he’s re-elected.
Trump was referring to the Tax Cuts and Jobs Act of 2017, which drastically modified the U.S. tax system. Amongst other changes, the TCJA nearly doubled the usual deduction, reduced income tax rates, increased the kid tax credit, nixed personal exemptions and slashed corporate income tax rates.
TCJA was an enormous deal, to make sure. One evaluation found the law reduced the common American’s taxes by roughly $1,600, though households making between $308,000 and $733,000 benefitted essentially the most. But it surely was not the most important tax cut in history, in line with the Committee for a Responsible Federal Budget.
Lots of those TCJA provisions are set to run out at the top of 2025, teeing up a significant fight for the following president. On Thursday, debate moderators pressed Trump on his plans to increase and expand them, asking why corporations and the rich should “pay even less in taxes than they do now” given the nation’s record debt.
In response, Trump said that his tax cuts “spurred the best economy that we’ve ever seen just prior to COVID.” (See the economy section above for more details.)
Biden, meanwhile, vowed Thursday to “fix the tax system,” though he didn’t go into an excessive amount of detail. His proposed budget floats several tax changes of its own, including expanding the kid tax credit and providing homebuyers with $10,000 in tax credits. These suggestions are expensive, though.
Based on a June blog post from the Tax Foundation, a tax policy nonprofit, Biden’s 2025 budget would raise taxes by about $4.4 trillion on a gross basis and “substantially increase marginal tax rates on investment, saving and work.” Without those changes, the federal government would collect $62.6 trillion, meaning Biden is suggesting a tax increase of seven% — nowhere near the 300% tax hike Trump mentioned. And Biden’s tax hikes can be paid for largely by wealthy Americans: He’s repeatedly said that anyone making lower than $400,000 won’t pay higher taxes.
Social Security
- Biden said Trump “desires to do away with Social Security” and “thinks that there’s plenty to chop in Social Security.” Biden suggested a rise in payroll taxes for prime earners to maintain this system solvent.
- Trump said Biden “goes to single-handedly destroy Social Security” by giving advantages to “thousands and thousands of individuals [who] are pouring into our country.”
Social Security is a tough subject because neither political party desires to be the one to alienate thousands and thousands of older voters by cutting their beloved (and heavily-relied-upon) advantages. But this system is in a funding crisis: Unless Congress acts, Social Security’s trust fund reserves will run out in 2035, at which point it’ll only give you the chance to pay out 83% of advantages. An instantaneous, across-the-board advantages cut would ensue.
When asked through the debate keep Social Security solvent, Biden suggested making wealthy Americans “begin to pay their fair proportion.” Because it stands, employers and staff each pay 6.2% of their wages as much as $168,600. This yr, millionaires reached that threshold in March.
Biden’s plan could move the needle. If, for example, the payroll tax were to be applied to earnings over $250,000 along with earnings below the present threshold, the trust funds would make it until 2046, in line with the Congressional Budget Office.
On Thursday, Biden appeared to suggest he’d raise payroll taxes for people earning over $400,000 a yr, which might change the calculations.
Trump’s position on Social Security has modified recently. In March, he told Breitbart that he “won’t ever do anything that can jeopardize or hurt Social Security or Medicare” — but those comments followed a CNBC interview through which he said “there may be rather a lot you may do by way of entitlements by way of cutting.” He has not put forth a proper proposal on fix Social Security.
In the course of the debate, Trump linked the Social Security funding problem to immigration, implying that the present president is providing advantages to “all of those people … coming in.” But in line with the Social Security Administration, only “lawfully present noncitizens of the US who meet all eligibility requirements” are capable of qualify. As well as, people generally need to work for 10 years and be at the least 62 years old to assert Social Security retirement advantages.
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