Joe Biden has received international praise for leading an economy that has achieved incredible growth. But as he prepares to resign on Monday, many Americans feel worse off than when the president took office.
Biden’s four-year term spanned a period of global economic upheaval, from the coronavirus pandemic and the worst inflationary shock in a generation to rising tensions with China. Still, data compiled by BCG analysts shows that Donald Trump will take office with one of the strongest economic backgrounds of any president since Jimmy Carter.
“Biden inherited a Covid patient economy and he leaves an extremely strong one,” said Mark Zandi, chief economist at Moody’s Analytics.
The US unemployment rate is near historic lows and inflation is falling, albeit slowly. The S&P 500 is also up more than 50 percent since the start of Biden’s tenure.
Meanwhile, US economic policy has moved away from free market orthodoxy towards a greater role for the state. “Bidenomics”, according to the president’s own words, was about “growth of the economy from the middle outwards and from the bottom up”.
But many American voters — including those at the bottom of the income ladder — believe the country’s economic resilience has not helped them.
His policies, including the $369 billion Inflation Reduction Act, failed to reach the general public, passing what political analysts call the “Reagan test.”
In the final debate of the 1980 presidential race, Republican candidate Ronald Reagan asked the public, “Are you better off now than you were four years ago?” A University of Michigan survey shows that Americans of all income groups feel the answer to that question is below Biden is an emphatic “no”.
Ahead of the election, Americans consistently thought Trump would be better at managing the economy than the president, according to Financial Times-Michigan Ross polls.
Inflation, which has risen to multi-decade highs during Biden’s tenure, is ranked as voters’ top concern.
While many economists have blamed the price spike on global factors such as supply chain problems, others say his $1.9 trillion 2021 US bailout — which provided direct stimulus payments to households — played a key role in driving up costs. daily staples such as eggs, bread and rent.
Although the budget deficit as a share of GDP has fallen, it is still uncomfortably high, at an estimated 6.4 percent. The federal debt is also on an upward trajectory, the scale of which the independent Congressional Budget Office described as “unprecedented.”
Loose monetary policy when Biden became president also contributed to post-pandemic price increases. That left the Federal Reserve playing catch-up, using spikes in interest rates of up to 75 basis points at a time to ease price pressures.
While inflation is now closer to rate setters’ 2 percent target, the rate hike dampened economic sentiment leaving borrowing costs at their highest level in more than two decades.
Consumer prices, on the other hand, remain more than 20 percent higher than in January 2021.
“What the Democrats did was inflation,” said Stephen Moore, a former senior economic adviser to Trump.
Other economists point out that the administration has made some advances for working families, such as temporarily expanding the child tax credit and providing more support for health insurance.
Low-wage workers also experienced the fastest real wage growth of any income group under Biden, according to Institute for Economic Policy. More Americans are also working than when he began his term.
But most of the Covid-era support has been temporary and poorly targeted, according to analysts.
The child poverty rate has rebounded after initially halving, while plans to permanently expand welfare programs have failed.
“The administration has been unable to overcome legislative opposition to labor law reforms or raising the federal minimum wage,” said Josh Bivens, chief economist at EPI, adding that the administration’s gamble that its progressive policies would become too popular to roll back backfired. “Progressives should not rely on programs that create their own electorate.”
Despite a tight job market and stimulus checks, many of the poorest Americans still feel worse off than when Biden entered the White House.
Low-income households spend most of their income on basic necessities, the prices of which have risen the most, according to research by Oxford Economics.
“The irony of the Biden presidency was that lower- and middle-income households suffered the most,” Moore said.
With savings built up during the pandemic now mostly spent, the share of loan balances in serious default — defined as payments 90 days or more late — on credit cards and auto loans is near the highest since the 2008 financial crisis. .
Despite the Biden administration’s focus on “middle-class Americans,” it was corporate America that saw the real boom, especially as enthusiasm over artificial intelligence pushed stock prices higher.
Although under its chief Lina Khan, the Federal Trade Commission has been aggressive in bringing antitrust cases to Big Tech, Trump’s new team — with its ties to tech billionaires such as Elon Musk — is expected to give the sector a freer hand.
Economists believe that over time, Biden’s industrial strategy — implemented not only through the IRA, but also through the Chip Act and protectionist policies aimed at Chinese competitors — will leave a bigger mark on the US economy.
“The balance will shift in Biden’s favor as the memory of the inflationary shock fades,” said Ian Shepherdson, editor-in-chief of Pantheon Macroeconomics. “The transformations brought about by his investment programs continue to bring broad benefits to the entire economy.”
The White House estimates that private companies committed 1 trillion dollars of investment as part of Biden’s packages — just under half of that was in electronics and chips.
New factories and battery factories were springing up all over the country. Taiwan Semiconductor Manufacturing Co recently started manufacturing advanced four-nanometer chips for US customers in Arizona.
“A bipartisan consensus is now emerging on the role of government in reindustrialization,” said Daniel Correa, executive director of the Federation of American Scientists. “Whether we call it industrial strategy or not.”
But both the IRA and the Chips act faced setbacks.
An FT investigation in August found that 40 per cent of projects of at least $100m announced in the first year of the law were put on hold or delayed. Labor shortages, licensing issues and local procurement requirements were cited as barriers.
So far, the promised increase in jobs in production has also been absent. Job creation under Biden was driven by the public sector, services, and health and social care.
Economists have criticized the effort to re-establish global industrial supply chains at home as wasteful and undermining free trade.
Recent research by Peterson Institute for International Economics estimates that the average subsidy per job created under the Chip Act could be roughly twice the average annual salary of a U.S. semiconductor employee.
The packages are also expected to be scaled back by the Trump administration, although the prevalence of new investments in Republican states could keep them alive in some form.
Many believe that Biden left behind a strong but highly indebted economy.
“Just as Trump inherited a strong economy in 2017, the same is happening in 2025,” said Maurice Obstfeld, senior fellow at the Peterson Institute think tank. “[But] Biden’s legacy is mixed. His achievements came with collateral damage such as increased inflation, deficits and protectionist barriers.
“His policies either had a long delay, were temporary or simply did not reach the voters. . . For now, the winners are in a position to try to make history,” added Obstfeld.
Additional data visualization by Oliver Roeder in New York
