More than half of Americans say the economy is getting worse. Here’s why they’re worried and how you can improve your personal finances.
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The state of the economy has been anything but predictable over the past few years. Supply chain shocks from the pandemic, surging inflation, rising interest rates, and skyrocketing housing costs have weighed it down. And yet, the job market has been resilient, and the U.S. has, so far, avoided a recession many thought would have been here by now.
But the latest data shows Americans aren’t optimistic about the economy.
A recent poll conducted by CBS News found that 66% of respondents disapproved of President Biden’s economic strategies, collectively referred to as “Bidenomics.”
I have no interest in propping up or tearing down any politician’s economic policy. Still, it’s important to understand Bidenomics at a basic level because it has the potential to help or hinder America’s growth in the coming years.
So, let’s take a quick look at Bidenomics and why Americans aren’t enthusiastic about it right now.
What Bidenomics is
Bidenomics is a philosophy that President Biden says focuses on improving the middle class through public investments, a focus on workers, and expanding government aid. Here’s a brief overview of what Biden’s philosophy look like in practical terms:
Pandemic stimulus: Biden’s first significant economic move was to sign the American Rescue Plan, a $1.9 trillion stimulus, into law. The result helped prop up the U.S. economy during the COVID-19 pandemic and led to the start of new small businesses and gross domestic product growth of 6%.
Public investments: The Biden administration has focused on investing in infrastructure, clean energy, and semiconductor manufacturing, totaling $500 billion since 2021. These investments have come through the Infrastructure Investment and Jobs Act, Inflation Reduction Act, and CHIPS Act. The administration says that the infrastructure legislation has led to 35,000 new projects.
Focus on workers: The Biden administration has focused some of its support on unions and creating apprenticeships. The administration says that 13 million jobs have been created since Biden took office, the share of working-age Americans in the labor force is the highest in more than 20 years, and unemployment is at a near-historic low. Biden also signed an executive order in 2021 to scale back non-compete clauses for workers.
Expanding government aid: The Inflation Reduction Act included some provisions that helped lower the cost of prescriptions for people on Medicare, added a cap on insulin costs, and extended larger subsidies for families who buy insurance through the Affordable Care Act marketplace. The administration also made it easier for children to stay on Medicaid and made food stamps more generous for families.
Why Americans aren’t buying Bidenomics
While there are pros and cons to most economic strategies, some Americans believe Biden’s moves are making their personal finances worse.
The CBS News poll showed that 45% of respondents said the administration’s policies are increasing inflation and just 19% believe they’re slowing inflation. They’re also not optimistic that things are on the right track, as 58% say the economy is getting worse.
Not surprisingly, high prices for goods is the top reason people say the economy and their financial situation are doing poorly.
How to lessen inflation’s impact on your wallet
There’s not much any of us can do about current economic policies, but there are a few things you can do to improve your personal finances.
First, as high prices have eaten into your monthly income, it may be necessary to look more closely at your monthly expenses to see if you can cut out anything. I did this recently and found a few subscriptions I could easily live without. I also downloaded a budgeting app to track my monthly spending automatically.
Second, invest in assets if you’re able to. Buying stocks, bonds, or other assets that have the potential to outpace inflation is a great way to soften the impact of rising prices. If you’re already contributing to a 401(k) plan at work, it may be tempting to scale back right now. But continuing your contributions is a great way to keep your money growing.
And finally, if you’re having difficulty covering your expenses, you may want to consider a debt consolidation loan. For example, if you’re paying high interest rates on your credit cards and other debts, you may be able to consolidate those debts into a single loan with a lower interest rate.
While inflation may be cooling, there’s still a lot of uncertainty in the economy right now. Keeping track of your expenses, investing in assets, and paying off debt are all important steps to getting yourself in strong financial shape.
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