According to surveys by the polling institute YouGov, a majority of the US population trusts former President Donald Trump to have more confidence in the economy than incumbent 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 the key economic data for the United States?
Claim: “Biden is destroying law and order, the economy is in free fall. Our economy did well under Trump, we need four more years with him,” wrote US Senator Tim Scott on March 28 on X. Other users also long for the “booming economy under Trump.”
DW Fact Check: Misleading.
The first three years under Donald Trump were economically promising with growth rates of over two percent. However, there is no evidence of a long-lasting “boom”.
According to the scientific definition, this is characterized by “a pronounced increase in economic activity, which is reflected in high growth figures, capacity utilization that is well above normal, a noticeable increase in employment and a bull market.”
Trump started his first term in office on January 20, 2017 with economic growth of 2.4 percent. In the Corona year 2020, the economy collapsed by 2.2 percent, but recovered in the last quarter and then shot up to 5.8 percent.
Under Biden, the economy is not in “free fall,” as US Senator Scott claimed, but has leveled off at growth of around two percent. Economic growth of 2.1 percent is forecast for 2024.
The comparison shows that the USA did not experience an economic boom under either Trump or Biden, but rather had to struggle with the economic consequences of serious crises such as Corona and the Ukraine war.
Claim: “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 association “Americans for Prosperity,” which offers a “fact check” online about Biden’s economic policy.
DW Fact Check: Misleading.
It is true that, according to official information, the national debt in the USA rose to a historic 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 of office than under Biden. Between 2017 and 2021, outstanding debts climbed from $19.84 trillion to $28.13 trillion. This corresponds to an increase of 41.62 percent.
Under Biden, debt grew from $28.13 trillion to $34 trillion in December 2023. This represents growth of 20.86 percent.
In contrast to “Americans for Prosperity”, which accused Biden of “reckless spending” during the election campaign, the US Treasury Department blames two factors for the development: additional spending due to the corona pandemic and the war in Ukraine, as well as lower tax revenue.
The decline 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 quiet.
Trump’s tax reform reduced corporate taxes from an average of 35 to 21 percent in 2018. Income tax rates were also reduced. The increased government spending was financed through debt.
Conclusion: Trump is also partly responsible for the rising national debt.
Claim: “Joe Biden has triggered record inflation in the US and it’s 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 Fact Check: False.
The statement ignores important statistical data. Because it doesn’t mention that the inflation rate in the USA has been falling continuously for a year.
According to the White House, the figure was 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 corona pandemic it rose to 4.6 percent in 2021.
Conclusion: The cause of the rising inflation is actually Corona and the Russian invasion of Ukraine, which caused an explosion in energy prices, and not Biden’s economic policy.
Claim: “The stock markets are performing exceptionally because they expect me to win.” Trump made this claim on the “Truth Social” network on January 29, 2024, in view of the high on the American stock markets.
DW Fact Check: False.
“My polls against Biden are so good,” he wrote there, “that investors are betting on me to win, and that creates momentum.”
In fact: between April 2023 and April 2024, the S
However, the boom in 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 recovery in the US stock market began at the end of 2023, when Fed Chairman Jerome Powell suggested that “the phase of historically high interest rates could soon be a thing of the past given the faster-than-expected fall in inflation”.
Given the good performance of the US economy and “in the hope that if the economy develops broadly as expected,” Powell said on April 4, a rate cut later in the year could be appropriate.
According to analysts, other factors are also contributing to the high on the stock markets, for example “optimism regarding artificial intelligence”. Trump’s post shows overconfidence rather than economic competence.
Author: Astrid Prange de Oliveira
The original for this article “Trump: “The stock markets are performing outstandingly because they expect my victory”” comes from Deutsche Welle.