In State of the Union address, Biden will highlight his dishonest take on the economy

President Biden seemed extremely happy to take credit for the booming January jobs report, “We have created more jobs in two years than any presidential term within two years. That’s the strongest two years of job growth in history, by a long shot,” Biden boasted.

Unfortunately, Biden could not leave well enough alone. Asked by a reporter whether he took responsibility for manufacturing the highest inflation in 40 years, he snapped “Do I take any blame for inflation? No. Because it was already there when I got here, man.”

He went on: “Remember what the economy was like when I got here? Jobs were hemorrhaging, inflation was rising, we weren’t manufacturing a damn thing here … that’s why I don’t.”

Oh my; Biden wonders why people think he is dishonest.

Biden either has severe short-term memory problems or he is purposefully lying about how the economy has trended over the past few years.

Here is the truth: The economy was in great shape in 2019 but then got hit hard by COVID-19 in early 2020, while Donald Trump was president. Trump’s administration listened to the health experts and closed down the country to “stop the spread” of the virus. In April 2020, the nation lost 20.5 million jobs, and the economy plunged into recession.

But thanks to what the Committee for the Responsible Federal Budget describes as “appropriate” spending, Congress passed $3.4 trillion in relief bills meant to keep employees on the payrolls and American families afloat.

It worked, and quite soon – more quickly than most companies expected – demand rebounded, and in the third quarter of 2020 GDP grew at an astonishing 38 percent clip. Growth continued through the end of the year, and when Joe Biden assumed the presidency, jobs were coming back and the economy was expanding at a solid 6 percent rate. In short, contrary to what the president claims, the economy was recovering nicely.

But the biggest lie from the president is that inflation was “already here.” Not so.

Inflation was running at a low 1.4 percent when Biden took office. By the end of 2021, it had increased five-fold to 7 percent, on its way to 9 percent several months later.

These facts have not prevented Biden over the past year from boasting that “his economic policies are working.” We will hear more of that in his State of the Union Address on Feb. 7. The surprising employment report for January, showing that 517,000 jobs were added despite a slowdown in many sectors of the economy, has given the president much to crow about, and crow he will.

Biden’s rose-colored rendition of the economy will also focus on his absurd claims of having reduced our federal deficits and boosted incomes.

Here’s what Biden will not highlight:

1) That excess government handouts have caused millions to sit on the sidelines, driving wages and inflation higher and causing the Federal Reserve to push our country towards recession;

2) That Americans in the lower and middle-income brackets have seen their real incomes clobbered under this president, despite his insistence that he is growing the economy “from the bottom up and the middle out”;

3) That Biden’s ongoing spending is driving our federal debt, and the interest on that debt, to unsustainable and dangerous levels.

It is true that more jobs have been added since Joe Biden took office than has occurred under any other president. But it is also true that Biden’s policies have worked against that return to normal.

Consider: In January 2020, just as COVID-19 began to spread through the United States, the Bureau of Labor Statistics says there were 259 million people in our civilian “noninstitutional” population. Today, there are 266 million, an increase of 7 million people. But the number of employed persons has increased only 1.4 million over those three years. Where are the remaining 5.6 million people? Why are they not working?

This loss of workers is the Achilles heel of Biden’s presidency. Low unemployment is no great victory if millions are choosing not to work, living off expanded government benefits that increasingly require no work and no job training. Federal Reserve Chairman Jerome Powell describes the labor market as “out of balance”; he is right.

It is unconscionable that Biden is still creating speedbumps to increased employment by, for example, not requiring people to pay their student loans.

In his upcoming address, Biden will repeat his recent boast that “take-home pay for workers is going up.” Politifact refuted that claim, pointing out that wage gains have been wiped away by inflation. The result, according to the Dallas Fed, was the biggest hit to middle class incomes in 25 years.

The president will say, as he has done on several occasions, that he has lowered our budget deficit. This is laughable in that he has reduced spending and the deficit only from the horrifying emergency levels to which it rose as our country battled the pandemic. As the non-partisan Committee for a Responsible Federal Budget reports, “Congress and the White House should have stopped engaging in new borrowing” in 2021 but instead, Biden expanded our budget deficits by $4.8 trillion through administrative actions and legislation.

The president will tout the decline in inflation since the peak of 9 percent hit last year. He will be right, but the reduction comes with growing anticipation of a recession. In a recent Gallup poll, Americans put the economy as a chief concern, topped only by worries about the government. Some 72 percent said they thought the economy was getting worse, and confidence in the economy was lower than at the height of the pandemic. That’s the real state of the union.

Liz Peek is a former partner of major bracket Wall Street firm Wertheim & Company. Follow her on Twitter @lizpeek.