Who has more economic experience, Biden or Trump? The data speaks for one, the surveys for the other. DW examined four claims about US growth, inflation, debt and stocks.

According to polls from the YouGov polling institute, the majority of the American population believes that former President Donald Trump has more confidence in the economy than current President Joe Biden.

Only 26 percent of voters surveyed in February of this year believe Biden is a capable economic politician. Trump, on the other hand, achieved approval ratings of 47 percent.

But do these survey results correspond to key US economic data?

Booming economy?

Say: “Biden is destroying law and order, the economy is in free fall. Our economy was doing well with Trump, we need four more years with him,” wrote US Senator Tim Scott on March 28 on X. Other users also long for the “Economy booming under Trump”.

DW Data Verification : Misleading.

Donald Trump's first three years were economically promising, with growth rates above two percent (see chart). However, there is no evidence of a lasting “boom.”

According to the scientific definition, this is characterized by “a sharp increase in economic activity, reflected in high growth figures, well above normal capacity utilization, a notable increase in employment and a bull market.”

Trump began his first term on January 20, 2017 with economic growth of 2.4 percent. In the Corona year 2020, the economy plummeted by 2.2 percent, but recovered in the last quarter and then soared to 5.8 percent.

Under Biden, the economy is not in “free fall,” as US Senator Scott claimed, but has stabilized at around two percent growth (see chart). For 2024, economic growth of 2.1 percent is expected.

The comparison shows that the United States did not experience an economic boom under either Trump or Biden, but instead had to struggle with the economic consequences of serious crises such as the coronavirus and the war in Ukraine.

Rising national debt

say : “Over the past four years, frivolous spending has caused the national debt to rise to $34 trillion.” This accusation is made by the Trump-affiliated “Americans for Prosperity” association, which offers an online “fact check” on Biden's economic policy.

DW data verification: Misleading.

It is true that, according to official information, the US national debt reached an all-time high of $34 trillion in the fourth quarter of 2023. This is equivalent to 124 percent of the US gross domestic product (GDP).

But it is also true that the national debt increased more in percentage terms during Trump's term than under Biden's. Between 2017 and 2021, outstanding debts increased from $19.84 trillion to $28.13 trillion. This corresponds to an increase of 41.62 percent.

Under Biden, the debt grew from $28.13 trillion to $34 trillion in December 2023. This represents a growth of 20.86 percent.

Unlike “Americans for Prosperity,” which accused Biden of “reckless spending” during the election campaign, the US Treasury Department blames this development on two factors: additional spending due to the coronavirus pandemic and the war in Ukraine, as well as the reduction of tax revenues.

The drop in tax revenue is due, among other things, to the tax reform introduced by Trump in 2018, a fact that his supporters tend to keep silent about.

Trump's tax reform reduced corporate taxes from an average of 35 percent to 21 percent in 2018. Income tax rates were also reduced. The increase in public spending was financed by debt.

Conclusion: Trump is also partly responsible for the increase in the national debt.

Biden and inflation

Say: “Joe Biden has caused record inflation in the United States and it is not going away.” Glenn Allen Youngkin, governor of the US state of Virginia, expressed this criticism on March 21, 2024 in an interview with the US broadcaster Fox News.

DW data verification: Incorrect.

The statement ignores important statistical data. Because it does not mention that the inflation rate in the US has been falling continuously for a year (see graph).

According to the White House, the figure will be 3.4 percent in 2023. In February the value fell again to 3.2 percent compared to the same month last year. In 2022, after the Russian invasion of Ukraine, the rate was eight percent.

When Trump took office, inflation was 2.1 percent and fell to 1.2 percent in 2020. During the coronavirus pandemic it rose to 4.6 percent in 2021.

Conclusion: The cause of the rise in inflation is actually the coronavirus and the Russian invasion of Ukraine, which caused an explosion in energy prices, and not Biden's economic policy.

High on the stock market

Say: “The stock markets are performing excellently because they expect my victory.” Trump made this statement on the “Truth Social” network on January 29, 2024, in view of the rise in US stock markets.

DW data verification: Incorrect.

“My polls against Biden are so good,” he wrote there, “that investors are betting I will win, and that builds momentum.”

In fact: between April 2023 and April 2024, the S&P 500 stock index rose 27 percent. The index is the third most important barometer of the US stock market, along with the Dow Jones and Nasdaq. Includes the 500 largest publicly traded companies in the US.

However, the rise of the US stock market has less to do with Trump's poll numbers and more to do with the interest rate policy of the US Federal Reserve (FED).

The US stock market recovery began in late 2023, when Federal Reserve Chairman Jerome Powell suggested that “the historically high interest rate phase could soon be a thing of the past given the fastest inflation decline in the expected”.

Given the strong performance of the U.S. economy and “with the hope that if the economy develops broadly as expected,” Powell said on April 4, a rate cut later this year could be appropriate.

According to analysts, other factors also contribute to the rise in stock markets, such as “optimism regarding artificial intelligence.” Trump's post shows overconfidence rather than economic competence.

Author: Astrid Prange de Oliveira