The U.S. Economy: A Look Back and a Glimpse Ahead
As we approach the end of 2024, it is time to reflect on where the U.S. economy stands and consider the challenges looming on the horizon as Donald Trump prepares to take office. The big question is: Will the progress achieved under President Biden’s leadership survive the policies of a second Trump term? The answer, based on evidence and past performance, is deeply concerning.
The Economy Today: A Success Story
Contrary to the narrative pushed by current media and outspoken politicians with an agenda, the U.S. economy is in a powerful position as we close out the 2024 year. Unemployment, average wages, inflation, and interest rates are key metrics used to determine how well the economy is doing.
Unemployment during the last 4 years has been down to its lowest in 50 years. In fact, during 2021-2023, US unemployment fell and maintained less than 4 percent for almost two consecutive years, a streak that is unmatched since the Vietnam War. To add to this great achievement, wages have increased by 4.2% year-over-year, putting more money in the pockets of families who need it the most.
In 2021, inflation hit 7% as a result of the mishandling of COVID causing disruptions in supply chains and reduction of the workforce. Since then, inflation has come back down to 2.7% as of December 2024, proving the US has a resilient economy. Biden’s policies were deliberately designed to balance economic recovery with sustainable growth, and aimed at stabilizing the post-pandemic economy.
The Federal Reserve’s target range of 4.25%-4.5% strikes a delicate balance between curbing inflation and supporting economic expansion. The lower the Fed Reserve rate is, the cheaper it is to borrow money, making it easier to buy a home and other big purchases. Lower rates can be a good thing, but when rates are too low, it can cause too much growth, resulting in inflation, the rate must be balanced so that the economy is at sustainable levels.
Beyond the Numbers
While these figures illustrate recovery and resilience, they also highlight a systemic issue: corporate greed. Companies have continued to overprice goods, preventing lower inflation rates from translating into reduced costs for consumers. Unfortunately, the US president has little control over how companies price their goods and services. This can only be controlled by consumers refusing to purchase goods when prices are high, forcing companies to bring them down.
Job Creation: Building for the Future
Consistent job growth has been a cornerstone of Biden’s presidency, especially within sectors with long-term benefits. Starting with Biden’s signature legislation, the American Rescue Plan Act, Biden added 6.7 million jobs in his first year in office, more in one year than any other president since World War II. Data show that the acceleration in job growth is a direct result of Biden’s policies.
By the start of Biden’s second year, 92.8% of jobs lost because of the pandemic were recovered. For comparison, the Great Recession took 4 years to recover jobs to levels of pre-recession.
Biden’s CHIPS and Science Act of 2022 provided the Department of Commerce with $50 billion for programs to revitalize the US position in semiconductor research, development, and manufacturing, adding more long-term job opportunities to the field.
Biden’s Infrastructure Bill provided funding of $42.45 billion for a program to expand broadband to areas where it hadn’t been available before the bill, creating more jobs in the field. These jobs ranged from installation technicians all the way down the chain to jobs in manufacturing. Thanks to Biden, the US manufacturing employment is the strongest it’s been in 72 years and the second strongest since World War II.
Biden has focused on jobs that have long-term impacts on the country:
- Green Energy: Investments in renewable energy have not only reduced emissions but also created high-quality jobs in sustainable industries.
- Infrastructure: Programs targeting rural broadband access and transportation upgrades have brought economic opportunities to underserved areas.
- Small Businesses: Initiatives supporting entrepreneurs have empowered communities to thrive.
Other Areas of Progress
- Housing: In June 2024, Biden awarded $85 million in housing funds to 21 states for a new program that removes barriers to developing more affordable housing units in order to bring down high housing costs. Another $100 million in revenue was diverted to the new affordable housing financing fund as well. Biden proposed another $100 million as part of the 2025 budget in October, but Republicans blocked it. The funding bill was extended until December, but Republicans again blocked the funding from the bill. The funding bill was extended until March 2025, when it will be back on the floor.
- Healthcare: Biden’s policies lowered medical costs for seniors by capping insulin costs at $35, and out-of-pocket costs for prescription drugs at $2,000. He also passed a bill that allows Medicare to negotiate prescription prices. Biden has taken steps to protect consumers from insurance scams and to have access to mental health care. He also expanded subsidies to increased insurance access, reducing medical bankruptcies and easing financial pressures.
- Energy: Biden took steps to end government handouts to “big oil” companies and ensure they paid natural resource damages. He also signed orders to require oil and gas companies to pay for construction and maintenance of shipping lanes to transport oil and gas.
Renewable investments are driving down long-term energy costs and Gas prices are a national average of $3.006 per gallon as of December 30, 2024
Interestingly, Biden has approved more drilling permits (10,070 in three years) than Trump did in his first three years (9,892). Yet, renewable energy investments demonstrate a commitment to balancing immediate needs with a sustainable future.
The Trump Threat: A Return to Recklessness
With Trump poised to take office, his plans signal a stark departure from policies that have fostered stability. These concerns extend beyond economic policies to profound governance issues that threaten the democratic fabric of the nation. Here is what we can expect:
Tax Cuts for the Wealthiest
Trump's advocacy for tax cuts for high-income individuals and corporations aims to stimulate investment. Still, historical evidence from his first term shows that these cuts did not lead to substantial economic growth or significant job creation. Instead, much of the tax savings were directed toward stock buybacks, benefiting shareholders rather than the broader economy. Reduced corporate tax rates, while aiming to make American businesses more competitive globally, often face challenges from other factors such as labor shortages and increased tariffs, which erode the benefits of tax cuts.
Trump’s tax agenda for 2025, centers on further enriching the ultra-wealthy at the expense of working families. His plan to extend and expand the 2017 tax cuts will disproportionately harm middle- and lower-income Americans:
The Poorest 20% ($0–$28,600): Taxes increase by $790 annually.
Middle 20% ($55,101–$94,100): Taxes increase by $1,530 annually.
The Richest 1% (over $914,900): Taxes decrease by $36,320 annually.
The result? A ballooning deficit, which Trump plans to offset with tariffs—a hidden tax on consumers.
Tariffs: A Hidden Tax on You
Trump’s commitment to imposing tariffs on Chinese and other imported goods guarantees higher prices for American consumers. Tariffs act as a direct tax on imported goods, increasing their retail prices and making them more expensive for consumers to purchase. Beyond price increases, tariffs can lead to the unavailability of certain products, as rising costs make some goods too expensive to import in large quantities. This creates economic strain, disproportionately affecting middle- and lower-income families, straining household budgets, reducing disposable income, and dampening overall consumer spending.
An average household spends about $6,440 per month, with tariffs of 15–20% on about half of their purchases, they will have an additional $5,796–$7,728 in annual costs, in addition to higher taxes.
Mass Deportations
Trump’s plans to deport millions of undocumented workers will severely disrupt industries like agriculture, construction, and hospitality, which rely heavily on migrant labor. This will exacerbate existing labor shortages, increasing operational costs for businesses and leading to higher prices for goods and services.
A significant workforce loss will limit production capabilities hurting the economy and creating shortages of essential goods domestically, and tariffs will increase the cost of the goods to be imported.
Trump’s promise to deport millions of undocumented workers will devastate industries like agriculture, construction, and hospitality, driving up costs for domestic products and services. In addition to the devastation in several industries, Trump’s plan for mass deportation does not include a means to pay the cost, which ultimately will be taxpayers’ burden.
Cuts to Critical Programs
Under Trump’s "Project 2025," proposed cuts to programs like Medicaid, affordable childcare, and food assistance will disproportionately harm vulnerable populations, increasing economic inequality and reducing the quality of life for millions of Americans. Tax cuts for the wealthy and corporations, coupled with reduced government revenue from program cuts, will result in ballooning deficits. Trump plans to offset these increases with tariffs, effectively passing hidden taxes to consumers, further straining household budgets and widening the gap between the wealthy and the poor.
Governance Concerns: From Democratic Republic to Oligarchy
Beyond economic policies, Trump’s governance style poses severe risks to the democratic principles of the United States. Attempts to centralize authority and bypass traditional checks and balances threaten the integrity of democratic institutions. Trump has shown tendencies to undermine judicial independence and weaken legislative oversight when in power, this will only deepen.
Additionally, undue influence from wealthy donors and influential allies raises concerns about policies being shaped to favor the interests of the few over the many, fostering corruption and increasing economic and social inequalities.
Policy inconsistencies, such as Trump’s recent support for Elon Musk’s controversial stance on H-1B visas despite previous opposition, demonstrate how easily swayed Trump’s standards are and make evident what’s best for Americans is not Trump’s main focus.
Authoritarian tendencies are further brought to life by statements about taking control of countries and land not up for sale, which are indicators of expansionist ambitions that deviate sharply from democratic and constitutional principles. These governance risks underscore the potential for systemic erosion of democratic norms and values.
The Stakes Could Not Be Higher
A second Trump term brings both opportunities and profound risks. But the risks outweigh the slight potential of any opportunities. We have already seen how Trump's policies fail Americans, and this term is strengthened by experience. Trump hit many roadblocks in his first term, that prevented him from implementing many harmful things, he will not have those roadblocks this time.
While economic policies such as tax cuts and deregulation seem like benefits in theory, there is evidence that handing money to the super-rich does not have a trickle-down effect. Even if it did, the benefit would be snuffed out by raising costs from tariffs and increased taxes for people who already are struggling. Governance concerns pose existential threats to the democratic fabric of the nation. The potential shift toward an oligarchic and authoritarian regime, coupled with policy inconsistencies and corruption, demands urgent attention and action to preserve the values of inclusivity, fairness, and democratic integrity.
Trump’s rhetoric and cabinet choices paint a clear picture of an oligarchy in the making, where unelected millionaires and billionaires hold the reins, deciding which programs to slash and whose taxes to lower. For America’s lower- and middle-class families, this spells economic hardship and growing inequality. While Trump has repeatedly touted his promise to “drain the swamp,” his actions tell a different story—one that enriches the wealthy elite while leaving everyday Americans to bear the brunt of his policies.
The Path Forward: Advocacy and Engagement
The progress achieved during the Biden administration—rooted in sustainable growth, inclusivity, and fairness—is under serious threat. The question is not whether Trump’s policies will hurt the economy, but rather how deep and far-reaching the damage will be.
To navigate this pivotal moment, it is crucial to maintain awareness and take proactive steps. Staying informed about policy changes and governance actions is essential. Engaging in advocacy by supporting organizations that uphold democratic principles, economic justice, and social safety nets can make a significant impact. Communicating with elected officials to voice concerns and promoting accountability in leadership are vital actions. Preserving economic stability and democratic integrity requires collective effort, transparency, and accountability.
What You Can Do (WYCD)
Stay Informed:
Visit Congress’s website: www.congress.gov/get-alerts. Here you can read about current policies and receive alerts about new policies. Keep an eye open for policies that will impact the economy. You can see details include the text of the bill and the voting record for how representatives voted on the bill.
Read news from a variety of sources, don’t limit yourself to reading news from sources that align with your personal opinions, actively seek out information from outlets that hold opposing opinions. It is important to have a rounded view of information being circulated. News sources report on stories that they know their audience is interested in, when only limiting yourself to one news media source, you are certain to miss some stories. Using services such as Ground News will ensure you have access to all the essential news you need, instead of depending on a corporation to decide what news you should get.
Engage in Advocacy:
Support organizations that fight for economic justice, workers’ rights, and social safety nets. Volunteer your time or donate to causes that align with your values. You can find a directory of organizations in every state at https://www.usccr.gov/files/pubs/crd/private/all.htm.
Contact Your Representatives:
Reach out to your local, state, and federal representatives to voice your concerns about policies that harm working families. Calls, emails, and even social media messages can make an impact.
You can look up your representative and their contact information on several websites, including Congress, House, and Senate websites. I use Common Cause because you can put your address in the search and get an entire list of ALL elected officials.
https://www.commoncause.org/find-your-representative/addr/
Look for scripts and email templates in future unCommon Sense posts.
Spread Awareness:
Share articles, posts, and insights with your network to amplify awareness of the stakes. Start conversations about the real-life consequences of economic policies.
By taking these steps, you can play a vital role in holding leaders accountable and ensuring policies that protect the economic well-being of all Americans—not just the wealthy elite.
References
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