The Trump Biden Rematch (2024)

Approaching the November presidential rematch between incumbent President Joe Biden, a Democrat, and his predecessor Donald Trump, a Republican, the two candidates are already drawing distinctions over their economic records. And there are surely fundamental differences between them.

But any broad comparison is complicated by the huge disruptions at the onset of the COVID-19 pandemic in early 2020, which triggered two of the most extreme quarters of economic contraction and growth in U.S. history, followed by a bout of inflation reminiscent of the 1970s.

Should Trump be blamed for a collapse in output that rivaled the Great Depression? Should Biden get credit for millions of jobs created in 2021 that were largely a pandemic rebound? Below, a look at key measures of economic performance - from growth overall to the labor market, from tariffs to tax collections - that illustrate the contrasts and similarities between the economies under both.

The broadest measure of an economy’s performance is annualized growth in gross domestic product, a figure that counts every widget produced, every meal served, and every dollar spent by the government to measure changes to the country’s overall output.

There are reasonable debates about what it really means and how it is distributed, but GDP is one of the main economic scorecards: Generally speaking, the faster it grows, the healthier the economy. As with many of the broader statistics, what may be more interesting is how similar the Trump and Biden economies look.

Quarterly growth during Trump’s first three years, up to the pandemic, and Biden’s term beginning in 2021, compounded at an almost identical rate that annualizes to around 2.7%. Excluding Biden’s first year, arguably still influenced by the pandemic, it was a slower 2.3%.

Trump made tax cuts a centerpiece of his administration. Biden pushed through some modest tax increases and has proposed even more aggressive actions. Yet federal government collections have been mushrooming in spite of Trump’s tax reductions and beyond the tax increases under the current administration.

Even after adjusting for inflation federal tax collections have been rising.

The flipside to GDP is Gross Domestic Income, an estimate of what people and companies earn in return for inventing, producing and selling all those widgets and services. How it should get distributed is a perennial debate in U.S. politics.

As the health crisis eased, what had been a broad focus on keeping families and businesses financially intact shifted to the emerging problem of inflation, which spiked to levels not seen since the 1980s. Republicans and Democrats will spar mightily over the reasons, and over the significance of its decline alongside U.S. Federal Reserve rate hikes.

It may take years to understand how the pandemic changed the economy, but it was a volatile time for both good and bad reasons. On the downside, inflation erupted, seen as a combination of snarled supply chains and record federal deficit spending that began under Trump and continued under Biden, fuelling consumer demand.

Advertisem*nt · Scroll to continue

On the plus side: Business starts jumped and were sustained through Biden’s term. At first it was considered a response to the health crisis, motivated by people wanting more control of their environment and their earnings. But the change has persisted to the point some economists see a revival of entrepreneurialism.

Worried about a depression-style collapse, Congress approved trillions of dollars in payments to households, pumping up bank accounts with disposable income that consumers used freely first to buy goods and then later on “revenge” spending on services like eating out and travel that were unavailable during the pandemic. Over time inflation caught up and eroded some of that purchasing power.

One policy both Trump and Biden shared is the use of tariffs to curb U.S. trade with China, whether on a broad basis or applied to targeted goods, in the case of Biden, like electric vehicles. Alongside a broader rearrangement of global trade following the pandemic and the Russian war against Ukraine, the tariffs have lowered China’s direct share of U.S. imports. Mexico is now at the top.

One thing the Trump and Biden economies shared is a strong labor market. The jobless rate was 3.6% at the end of 2019, before the pandemic; it has gone as low as 3.4% under Biden and until May had been below 4% for more than two years.

Regardless of who’s in the White House, and whether it is for demographic or other reasons, the U.S. seems to have slipped into a period of sustained demand for workers, with a pandemic rebound that surprised even the most seasoned economists.

Filling jobs requires bodies, and for years after the 2007 to 2009 recession economists felt the U.S. labor force was forever scarred. There are demographic limits in an aging population. But economists are realizing that strong job markets, if they last long enough, do pull workers from the sidelines and into employment.

Wage pressure was a key feature of the pandemic economy, with its “Great Resignation” of workers. Amid a shuffling of occupations and tales of labor shortages, the strongest wage gains went to the lowest paid occupations.

The U.S. economy is a big ship that’s hard to turn, but presidential decisions do matter. Biden ramped up antitrust enforcement, for example. Trump’s administration thought tax cuts would boost private investment, and economists feel it did at least in the short term. Biden, by contrast, has steered public investments to what are seen as strategic industries and infrastructure.

But counter to their positioning as polar opposites, they’ve both embraced big deficits, overseen historically low unemployment rates, imposed tariffs on Chinese goods, and seen stock markets hit record highs on their watch.