Of all the falsehoods spread by MAGA Republicans, an underrated one poses grave danger, as Alan Austin reports.
*Also listen to the audio version of this article on Spotify HERE.
WE CAN CLOSE another year of recording what is happening in global economics – as distinct from what mainstream media falsely report – on a positive note. America’s economy, still the world’s biggest and most influential, is emerging strongly from the disastrous Trump period.
This is significant for several reasons. First, it means 335 million Americans now enjoy greater prosperity and security. Second, millions of people in other countries are benefiting from the increased trade generated by a thriving USA. A quick glance at the blue chart, below, shows the surge in imports since Donald Trump was ousted.
Third, a robust U.S. economy today helps dispel the dangerous myth that the economy was functioning well during the Trump period, a blatant lie that risks propelling the failed wannabe dictator back to the White House.
The real "Big Lie"
The term “Big Lie” usually attaches to the nonsensical claim by Trump and his Make America Great Again (MAGA) supporters that the 2020 Presidential Election was stolen from them by sinister forces. Yes, that’s big. But it is easily debunked. Most of the liars who generated that deliberate falsehood have now confessed to this in defamation cases or criminal proceedings.
Arguably, the larger lie in its potentially destructive impact is that the U.S. economy boomed under Trump’s magic entrepreneurial touch.
Trump has hammered this theme in virtually every speech since March 2017, two months after his inauguration, when the jobless rate fell unexpectedly.
Earlier this month at a campaign rally in Cedar Rapids, Iowa, he said:
Under the Trump Administration, we built the greatest economy in the history of the world. There’s never been an economy like we had. With soaring incomes, rising wages and household net worth hitting the highest level ever recorded. By far, greater than now and by far greater than at any other time ... Nobody has ever seen an economy like we had.
Those who compare economies worldwide for a living know the opposite is true. The U.S. economy faltered badly during the Trump years, following multiple extraordinarily foolish calls.
Appalling fiscal collapse
Trump’s first destructive decision was to slash the tax rate on the big, highly profitable corporations from 35%, where it had been since 1993 (and much higher between 1942 and 1987), to just 21%. This immediately cut budget revenue, blew out the deficit and added trillions to the national debt.
In 2019, the deficit was minus 4.7% of GDP, the worst of all developed members of the Organisation for Economic Cooperation and Development (OECD).
Outcomes in Trump’s last year, 2020, were worsened by his gross mismanagement of the COVID pandemic. The deficit that year exploded to minus 15.0% of GDP, the worst on record by far.
These plummeting deficits led to record debt, with the USA recording the OECD’s worst expansion of debt from 2016 to 2021.
Collapsing exports caused widespread suicides
Trump’s next harmful misstep was to impose unilateral tariffs, which provoked widespread retaliation, including the cancellation of billions of dollars of farm exports. Primary products imported by China alone plummeted from $19.5 billion in 2017 to just $9 billion in 2018.
Farmers rapidly lost their incomes, their savings, their farms and their lives. The best estimate of the number of farmer suicides, based on data from the National Farmers Union, the American Farm Bureau and clinical psychologists, is around 1,600.
In frantic response to this, the Trump Government scrambled to borrow billions of dollars, including from China, to give to farmers in emergency relief.
Between 2018 and 2020, the hapless Administration gave idle farmers a staggering $70.2 billion, all borrowed and all incurring interest payments for the indefinite future.
Countless farmers who had prided themselves on contributing to America’s prosperity and to its culture of rugged individualism were reduced to beggars.
Low ranking in the OECD
Wasteful spending escalated under Trump, including on scandalous cost overruns for military equipment, on extending the useless Southern wall, on transfers of hundreds of millions to his golf resorts for his solo golf outings, and countless other senseless projects and grifts.
By the end of the Trump presidency, the USA was one of the OECD’s laggards on most measurable outcomes.
The turnaround under Biden
Fortunately, recent reports confirm the USA is recovering rapidly. The actual figures are not the strongest historically, but are high on global rankings, thus confirming decisions have been right for the times.
Annual GDP growth at 3.0% for the third quarter ranks fourth in the OECD, behind only Israel, Mexico and Turkey. That’s up from outside the top 20 under Trump. The jobless rate at 3.74% is back in the OECD’s top ten. Inflation at 3.14% puts the U.S. in a group of nine in the benign band between 1.3% and 3.3%.
Christmas trade is setting new retail records. The Dow Jones index hit new highs last week and business start-ups are also at all-time highs. Wages rising at 5.74% put the USA among global leaders.
Private debt to GDP surged through the Trump years from 222.0% in 2017 to peak at 235.3% in 2020. This recovered substantially as soon as Trump was gone, down to 223.3% in 2021 and to 217.8% in 2022.
Clearly, the economy is now vastly better managed than at any time during the Trump years and is arguably outperforming all presidential terms since Bill Clinton’s boom years.
Hope through the Christmas season
The main reason Trump’s “best economy in the history of the world” claims are so perilous is that this is the lie most likely to get him re-elected, given opinion polls suggest it is widely believed. So let’s hope 2024 brings sanity to economic and political reporting in the USA. And elsewhere.
*This article is also available on audio here:
Alan Austin is an Independent Australia columnist and freelance journalist. You can follow him on Twitter @alanaustin001.
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