The Economic Policies of the 2020 US Election: Trump vs. Biden

This podcast episode provides an in-depth, non-partisan analysis of the economic policies proposed by Donald Trump and Joe Biden during the 2020 US federal election, strictly focusing on their economic merits and potential impacts. The host, an Australian citizen, emphasizes that the video is not a political endorsement but an objective assessment of fiscal policies, market implications, and economic recovery plans. A significant portion of the discussion is dedicated to demystifying the complex, multi-stage process of US fiscal policy formulation, highlighting the limited direct authority of the president over budgetary matters and the critical role of Congress, the Office of Management and Budget, the Congressional Budget Office, and various committees in drafting, scrutinizing, and passing legislation.

The analysis then delves into Trump's economic philosophy, characterized by free-market principles, lower taxes for individuals and corporations (exemplified by the Tax Cuts and Jobs Act of 2017), and reduced government spending. While acknowledging the expansionary effect of tax cuts, the episode critiques the 2017 act for its poor return on investment, disproportionate benefits to foreign investors, and its contribution to a stronger US dollar that hurt domestic exporters. Conversely, Biden's approach is presented as the mirror image, advocating for increased government revenue through higher taxes on high-income earners and corporations to fund greater government spending on infrastructure, social welfare, and healthcare, aiming to alleviate wealth inequality and boost the economy by targeting spending towards those with a higher propensity to consume.

A key distinction is drawn regarding the timing of these fiscal policies. The episode argues that the 2017 tax cuts were ill-timed during a strong economy, while Biden's proposed tax increases in 2021 could be contractionary and harmful to businesses recovering from the coronavirus pandemic, potentially leading to capital flight among globally mobile high-income professionals. Both administrations' approaches to government stimulus are also examined; Trump's historic stimulus, while rapid, was criticized for misdirection, whereas Biden's "Build Back Better" plan proposes targeted spending in manufacturing, renewable energy, and caregiving for long-term benefits. The urgent need for another stimulus package is underscored, with the podcast warning against political maneuvering that delays crucial economic support.

Ultimately, the episode concludes that while the presidential election is often dominated by divisive political issues, the economic policies of the candidates will have the most profound and direct impact on the day-to-day lives of Americans. It highlights the intricate interplay between political timing and economic necessity, particularly during a crisis, and stresses the importance of understanding the bureaucratic processes that shape economic outcomes. The discussion serves as a reminder that the promises made by presidential candidates are subject to the complex realities of legislative approval and economic conditions, often requiring significant compromise and adaptation.

"fiscal policy is simply the breakdown of government taxation and government spending in an economy"

"fiscal policy is not solely the domain of the president the process is actually extremely complicated"

"what the presidential candidate promises could be very different from what they deliver they don't have much direct authority over what money goes where beyond making nice suggestions for congress to consider"

"president trump is a free market guy who believes in lowering taxes on individuals and businesses and offsetting this reduced revenue with reduced government spending"

"joe biden is the mirror image of this with a plan to increase government revenue through higher taxes and then use that money to fund more government spending on things like infrastructure schools social welfare and of course healthcare"

"lowering taxation will have an expansionary effect on the economy but it might not necessarily be as large as the pundits of the bill would have you believe"

"the stock market does not equal the economy"

"most good economists have to remind themselves of this nobody actually sits down in their office twirling their moustache and thinking up new ways to be evil almost every public servant is acting in a way that they think will help their people"

"just like 2017 was not the right time to roll out tax cuts 2021 is not the right time to be passing these kinds of tax increases"

"tax increases are contractionary fiscal policies which is what you want to be doing during times of economic prosperity not during times of uncertainty"

"the nation needs a boost now not in three months"

"economic policy is far from the most exciting aspect of this election but it might very well be the most important in terms of what is going to have the most impact on americans day-to-day lives"