Nation Declines as Government Spending, Inflation Grow; Incomes Fall

Star Parker / July 12, 2023

Using statistics from the Department of Labor, The Wall Street Journal reports that real hourly wages during the Biden presidency have declined.

When Joe Biden took office in January 2021, the average hourly wage adjusted for inflation was $11.39. Now, 29 months later, it stands at $11.03, a 3.16% decline.

Stephen Moore of the Committee to Unleash Prosperity reports that the latest jobs report from the Bureau of Labor Statistics says that in the month of June, the largest growth in employment in the U.S. economy came from government.

Government’s net increase in employment in June was 60,000 workers, almost 20,000 more than the second-highest increase in the health care sector.

The economic legacy of the Biden administration, which they call Bidenomics, is the expansion of government at the expense of the private sector, along with massive spending, which has produced the worst inflation in 40 years, resulting in the erosion of the pay of American workers.

But what should really be worrying every American is that the Biden administration experience is not a departure from an otherwise healthy trend that can be quickly turned around with a Republican victory in 2024.

Biden is taking the nation down a dangerous path that began years ago and is in a long-term destructive trend that will take the boldest kind of leadership to turn around.

Economist John Cochrane of Stanford University’s Hoover Institution notes that “creeping stagnation is the central economic issue of our time.”

Economic growth since 2000 has fallen by half compared with the last half of the 20th century,” continues Cochrane.

From 1950 to 2000, the U.S. economy grew on average 3.56% annually. Since 2000, the annual growth rate averages 1.96% per year.

What does this mean? “The average American’s income is already a quarter less than under the previous trend,” notes Cochrane.

The latest projections from the Congressional Budget Office take this bleak picture and project into territory that is even bleaker.

More government, more debt, less growth.

First, a little perspective. In 1950, federal government spending as a percent of gross domestic product stood at 15.3%. In 2000, it stood at 17.7%.

The CBO projects that in 2024, federal government spending will be 23.6% of GDP; by 2035, it will reach 24.9%; rising to 26.0% by 2040 and 28.3% by 2050.

Corresponding CBO projections for the federal debt held by the public as a percent of GDP: 2024, 100%; 2035, 120%; 2040, 134%; 2050, 181%.

And the projected real growth rates for the U.S. economy: 2022-2033, 1.8%; 2034-2043, 1.6%; 2044-2054, 1.5%.

U.S. Treasury Secretary Janet Yellen has returned from a trip to China out of concern for China’s aggressiveness on the world stage.

China does indeed pose a threat to us. But the first order of business in dealing with threats from abroad is making our own country as strong as possible. And this is where our failure is taking place.

Biden’s approval rating has actually increased over recent weeks. And polling shows a presidential contest with Biden running against the leading Republican candidates basically too close to call.

This should not be the case.

The decline of our nation is crystal-clear for any clear-thinking and honest observer.

We need Republicans who are ready to deliver a clear message to the American people about how we will shrink the massive growth of government that is destroying our national vitality.

Our entitlement programs—Social Security and Medicare—drive some two-thirds of our federal expenditures. These are systems that are dinosaurs, with Social Security going back to 1936 and Medicare to 1968.

Reform needs to take place, not in the form of cosmetic changes, but deep and real change in the way of personalization.

Republican primary voters must demand a clear and bold vision from candidates about how they plan to restore an America that will once again grow at 3.5% per year.

The Daily Signal publishes a variety of perspectives. Nothing written here is to be construed as representing the views of The Heritage Foundation.

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