Trump’s Record Far Superior to Biden’s on Debt and Inflation

A new Wall Street Journal poll of academic and Wall Street economists finds that most believe that President Biden would do a better job holding down inflation, the debt, and interest rates than former President Trump.

This is a patently ridiculous conclusion that says more about the state of economics than it does about Trump or Biden. It reminds me of the old saying that if all the economists in the world were laid end to end… it would be a good thing.

We know these predictions are suspect because both Biden and Trump have actual records on inflation in their first terms. So we don’t have to throw darts at a dart board blindfolded as these economists apparently are doing. We can examine what happened while they were president.

On each one of these three measures, Trump’s achievements aren’t just a little better. They are FAR superior to Biden’s.

Let’s start with inflation. Over Biden’s near-four years in office, inflation is up roughly 20%. Under Trump, inflation was up 8%. So how could anyone argue that Biden will be better on inflation given that his rate is nearly three times HIGHER than Trump’s. This would be like saying a batter who has struck out four times in a row is more likely to hit a home run than a batter who has hit three homers in his last four at bats.

By the way, Biden did NOT inherit inflation from Trump. In his last four months in office the inflation rate was

Oct. 20—1.2%
Nov. 20—1.3%
Dec. 20—1.5%
Jan. 21—1.4%

Then, 18 months later, under Biden, it was 9.1%.

Now let’s look at interest rates. The mortgage interest rate was 2.9% when Trump left office. The mortgage interest rate is now roughly 7%. That’s more than twice as high. 

The higher interest rates and the inflation in rents and housing prices mean that the mortgage payment on a median value home is now TWICE as high under Biden as under Trump.

How about the interest rate on federal borrowing? During Trump’s last year in office, the 10-year Treasury bill was 0.9%. After three and a half years of Biden, the interest rate is at 4.3%. 

Finally, there is the issue of the federal deficits and debt. Neither president has a good record on controlling spending and borrowing. That’s because both parties like to spend money and play Santa Claus. The question is which president had a worse record?

When we take out the two COVID years, 2020 and 2021, we find that the average deficits under Trump were roughly $750 billion. That’s bad. But under Biden, the average deficit was $1.5 trillion. Even adjusting for Bidenflation, deficits have been at least 50% higher under Biden than Trump. 

But let’s put aside the real world record of Trump and Biden and look at their policy proposals. Trump wants to make the tax rate reductions permanent, continue to deregulate the economy, and encourage greater production of U.S. energy. 

All of these policies are DISinflationary. They will make America more competitive in the world economy, bring capital to the United States, keep the dollar strong, and increase the production of goods and services.

Biden wants to raise tax rates on American businesses, increase regulations, and continue to waste hundreds of billions of dollars on low-return green energy programs while curtailing U.S. production of oil, gas and coal. 

Only a Ph.D. in economics who teaches at an Ivy League school would believe that these Biden policies will bring inflation and interest rates DOWN. They need to take a history class.

When Jimmy Carter endorsed high tax rates, more regulation, and green energy policies, the inflation rate went to above 10%. When Reagan came into office and cut tax rates, deregulated, and went all in for American energy, the inflation rate fell by half.

Biden also points to the 16 Nobel Prize-winning economists who say he will be better on taming inflation than Trump. These are the very same economists who assured us when Biden proposed trillions of dollars of new spending that these policies would NOT cause inflation.

Maybe these economists should simply send back their Ph.D.s and their Nobel medals and admit that they have no idea what they are talking about.

Stephen Moore is a Senior Visiting Fellow in Economics at The Heritage Foundation.