At the start of Wednesday’s presidential debate, David Muir of ABC News pitched Kamala Harris a softball and Harris ducked it. Here’s the question in its entirety:
I want to begin tonight with the issue voters repeatedly say is their number one issue, and that is the economy and the cost of living in this country. Vice President Harris, you and President [Biden] were elected four years ago, and your opponent on the stage here tonight often asks his supporters: “Are you better off than you were four years ago?” When it comes to the economy, do you believe Americans are better off than they were four years ago?
The correct reply was a resounding Yes! But Harris changed the subject to two economic policies meant to distinguish her program from that of President Joe Biden. In so doing, she lost an opportunity to inform viewers about the Biden administration’s excellent record on economic policy (which to a great extent is also her own) and inadvertently lent credence to Donald Trump’s subsequent outrageous lies about Biden’s “terrible economy.” At one point Trump said: “They’ve destroyed the economy, and all you have to do is look at a poll.” That was half right: Polls continue to fault Biden’s handling of the economy. Public sentiment has, for some time, failed to align with nonsubjective data that tells the opposite story. That’s why Harris didn’t dare tell Muir: “Of course Americans are better off than they were four years ago.” But that’s the truthful answer, even as voters refuse, exasperatingly, to believe it.
The first of the two policies Harris described, instead of answering Muir’s question, was a proposed expansion of the child tax credit that she introduced in mid-August. Harris didn’t say so, but this builds on the Biden administration’s existing policy. In 2021, Biden increased the child tax credit, as part of his American Rescue Plan, from $1,000 to $3,000 ($3,600 for children under 6). Biden also made the tax credit, previously only partly refundable, fully refundable, putting the cash directly into the hands of families too poor to pay income tax. He also disbursed the proceeds in monthly increments rather than annually.
Every Republican in Congress voted against the American Rescue Plan, but it became law anyway. Even Kevin Hassett, a top economic adviser in the Trump White House, supported the American Rescue Plan. But Trump himself stated opposition to it as recently as last week, and faulted Harris for casting the tie-breaking vote in the Senate.
The policy proved a triumph. The Biden-Harris expanded child tax credit brought the child poverty rate down to a historic low of 5.2 percent. That’s well worth boasting about—but Harris didn’t mention it. Alas, Congress refused to renew the expanded credit beyond one year, and blocked the Biden administration’s subsequent annual efforts to revive it. Harris’s August proposal (which would similarly have to clear Congress) reinstates the Biden-Harris $3,000 tax credit and adds a second tax credit of $6,000 for a child’s first year of life.
The second economic policy Harris described, instead of answering Muir’s question, was one she announced earlier this month: to expand, from $5,000 to $50,000, an existing tax deduction for small business start-ups. This is more of a departure, since the Biden-Harris administration never proposed expanding this tax credit. It did, however, expand another existing program, the State Small Business Credit Initiative, which, acting through state governments, furnishes small businesses with cash collateral, loan guarantees, and equity investments.
That was also included in the American Rescue Act, which—again—not a single congressional Republican supported and Trump continues to attack. Biden has said the State Small Business Credit Initiative helped create “the three strongest years for new businesses on record,” and the U.S. Chamber of Commerce backs him up on that statistic. According to the Small Business Administration, more new businesses were created during the first three years of the Biden administration than during all four years of the Trump administration. That too is an accomplishment well worth boasting about. Harris didn’t bring it up.
Look, I get it. A Harvard CAPS Harris poll conducted last week showed 63 percent of voters still think the economy is on the wrong track under Biden, whose approval rating remains in the toilet. It’s not nice to tell voters they’re wrong, particularly given legitimate concerns about such long-term trends as growing income inequality and rural and Rust Belt decline. But voters are wrong about the Biden-Harris record, and if Harris and her fellow Democrats don’t give them the facts, they won’t learn the truth. Certainly Trump and his fellow Republicans won’t tell them.
Are you better off than you were four years ago? was the question that arguably lost President Jimmy Carter the 1980 election. “Next Tuesday all of you will go to the polls,” candidate Ronald Reagan said at that year’s presidential debate. “I think when you make that decision, it might be well if you would ask yourself: Are you better off than you were four years ago?” To demonstrate that voters were not better off, Reagan cited something called the “misery index,” a metric that added the inflation rate to the unemployment rate. Carter had beaten Gerald Ford, Reagan said, because the misery index was 12.5 percent. Now the misery index exceeded 20 percent. Reagan won.
Let’s try that with Trump and Biden. When Trump left office in January 2021 the unemployment rate was 6.3 percent and the consumer price index was up 1.4 percent. That made the misery index 7.7 percent. Today, under President Biden, the unemployment rate is 4.2 percent and the consumer price index is up 2.5 percent. That makes the misery index 6.7 percent. Biden’s misery index (and, by extension, Harris’s) is 13 percent lower than Trump’s misery index.
You might object that, as metrics go, the misery index is a relic dating from a time (late 1970s, early 1980s) when unemployment and inflation were both high, a puzzling phenomenon called stagflation that we haven’t seen since. Fine. How about household income instead? Median household income rose 4 percent, after inflation, to $80,610 in 2023, the last year for which data are available. In a report issued this week, the Census Bureau called it “the first statistically significant annual increase … since 2019.” Four years ago, median household income fell, after inflation, 2.9 percent over the previous year. The Census called that “the first statistically significant decline … since 2011 (italics mine). A 4 percent increase beats a 2.9 percent decrease.
Or how about job creation? When Trump left office, the United States had 2.7 million fewer jobs than when he entered. As of August, the United States had 6.7 million more jobs than when Biden entered office. Creating jobs beats destroying them.
Here’s one for the budget hawks: In fiscal year 2020, which ended one month before the election, the budget deficit was $3.1 trillion. In fiscal year 2024, the budget deficit is $1.9 trillion.
Trump would say these statistics are unfair, because they don’t take the Covid pandemic into account. Boo freaking hoo. Covid hit the U.S. harder than all but four of the 37 other nations in the Organization for Economic Cooperation and Development. The consensus among health experts is that this had a lot to do with Trump’s mismanagement of the pandemic. As I noted in August (“How the Democrats Finally Took On Big Pharma”), Covid deaths
were 40 percent higher in the United States than in Canada, France, Germany, Italy, Japan, and the United Kingdom, according to a commission assembled by the British medical journal The Lancet. Not all of this was Trump’s fault, the commission said, but Trump policies such as eliminating the National Security Council’s global health security team and leaving 700 jobs unfilled at the Centers for Disease Control and Prevention accounted for “tens of thousands of unnecessary deaths.”
The Georgetown economist Harry Holzer noted in a September 2020 report that Covid put significantly more people out of work, per capita, in the U.S. than in other OECD countries. During the crucial period of January to April 2020, the impact in the U.S. was 11 times that in the other OECD countries. Trump pretends that health care policy exists somehow apart from economic policy, allowing him to dither endlessly about finding a replacement for, or “improvement” to, Obamacare to an extent he’d never dare about, say, taxes. During the past nine years he’s progressed from “something terrific” to “I have concepts of a plan,” which is to say, not at all. It’s only health care, in which Republicans have shown little interest. But health care, in large part, is the economy.
Do economic problems linger? Of course. We have an affordable housing crisis, and, with the Fed finally conceding that inflation is tamed, it needs to cut interest rates this month dramatically to avert a recession in 2025. As I noted yesterday, banks that are too big to fail are also becoming too powerful to regulate. The political influence of the working class has atrophied. And the stock market’s been acting really weird.
But for Christ’s sake, of course we’re better off than we were four years ago. Four years ago was as bad a time in this country as I’ve ever seen. I lost my job in a flash recession, I was terrified of contracting a deadly disease, and while we waited for a vaccine some idiot in the Oval Office told everybody to inject Clorox into their veins. A few months later we had a deadly insurrection on Capitol Hill to prevent Congress from counting presidential ballots. We haven’t recovered fully from Covid or from Trump, because between these two a lot of furniture got smashed. But we’re much, much better than we were back then, and Harris mustn’t flinch from explaining why.
