The outbreak of war in Gaza between Israel and Palestine has created a tense atmosphere around the world, which can only be mitigated by U.S. leadership.   Republicans can help by acting in a responsible manner, but the Democrats are largely in charge under President Biden.

The problem is that Bidenomics, the economic policy of the Biden Administration, is unsustainable.  Consider:

• The main problem with Bidenomics is that it relies far too much on deficit financing which drives us the national debt.  The deficit for FY 2023 is $1.7 trillion, up from $1.4 trillion in FY 2022.  Such huge deficits greatly overstimulate the economy and, therefore, make inflation worse than otherwise and much harder for the Federal Reserve to control.
• The Inflation Reduction Act’s manufacturing tax credits include “prevailing wage” requirements, which force firms that take the money to meet or exceed the average minimum wage for that type of work. The requirements prevent firms from competing to reduce labor costs and effectively make unions wage setters.  Forcing nonunionized employers to pay the same wages as unionized ones is unionization by other means.
• Census Bureau data exposes the true cost of Bidenomics. Median real (inflation- adjusted) income has decreased each year since 2019 (see chart).
• The following chart shows even more dramatically the comparison between wage growth and inflation between the Trump years and the Biden years. Wage gains exceeded inflation during the Trump years but started to fall behind shortly after Biden took office in January 2021.  Only in the last few months has that trend reversed itself.
• Swing state voters, according to age, education, or income, all think that Donald Trump’s management of the economy is preferable to Joe Biden’s.

Conclusion.  The world now needs U.S. leadership more than ever.  The U.S. can’t continue to provide strong leadership without a strong economy.  Bidenomics does not provide a strong economy in the long run.  This is a huge problem going forward, with  implications for the U.S. presidential elections next year.

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