Bidenomics Is Having an Unusual Effect on Deficits
The White House’s policies have led to a strong economy, which usually reduces the government’s funding shortfall. Not this time.
The Biden administration’s economic plan has a hidden cost.
Photographer: Kevin Dietsch/Getty Images
Economists are playing a game of “can-you-top-this,” seeing who can ramp up their US economic growth forecasts the most. (Those at JPMorgan now predict a 3.5% annualized rate for the current quarter, up from the measly 0.5% they expected at the end of July). Many are saying that the recession most all of them predicted was imminent at the start of the year isn’t happening anytime soon. The White House says these are the fruits of “Bidenomics.” In reality, it’s more like a sugar high.
The hot economy may be getting all the attention, but the massive expansion in the federal budget deficit can’t be ignored. Back in May of 2022, the bi-partisan Congressional Budget Office projected a shortfall for fiscal 2023 ending Sept. 30 equaling 3.8% of gross domestic product. It revised that to 5.4% in February. With two weeks left in the fiscal year, the actual deficit is 7.9%.