The Economic Recovery from COVID-19 Under Trump and Biden

With less than two weeks left until Election Day, 26 million votes have already been cast in the U.S.’ highly polarized political climate. Irrespective of income, most Americans are perceiving the upcoming election as a “battle for the soul of the nation”. While high earners worry about their taxation under the Biden administration, millions of unemployed Americans hope for economic relief in one way or another. The current situation paints a picture of gaping economic disparity and two candidates promising immediate economic recovery.

With that being said, what might economic recovery look like under the Trump or Biden Administrations?

Clearly, Trump and Biden have divergent views on the future of the U.S., including but not limited to recovery from the global pandemic and recession. To begin, Biden has argued that any step towards economic recovery ought to begin with “combatting the pandemic”, as a means of reassuring Americans and paving the way for a “brighter future”. During the summer, Biden promised he would impose a national mask mandate to rejoin the WHO; however, recently, his vice presidential nominee, Kamala Harris, stated they would set a national standard for mask wearing, softening their initial stance. According to Trump, however, more authoritarian and restrictive policies during a pandemic would only destabilize citizens and worsen the situation. Trump has thus centred his focus on the immediate development of a vaccine, while encouraging daily life to remain at its usual pace to prevent further unemployment claims and damage.

With regard to economic policy tools, Trump has proven more authoritarian than Biden on the Federal Reserve, pushing policies like Quantitative Easing and low-interest rates in hopes of salvaging the plummeting economy and stock market. Trump’s business background should be taken into account when understanding his approach towards policy-making, wherein he treats the country as a profit-seeking corporation. Under a second term, Trump has promised greater tax cuts, especially on capital gain taxes. Trump’s reforms in his first term did not help citizens most intensely impacted by the recession as much as they did America’s top 1%, which, in fact, got richer. Alarmed by the widening income gap in the U.S., Biden, on the other hand, promises to double the capital gain tax rate, increase the corporate tax rate from 21% to 28% while reassuring his base and vowing to avoid increasing taxes for citizens earning anywhere below the $400,000 mark. Biden seems convinced of the efficiency of this action plan in helping lower income-earning citizens through income redistribution. Trump, however, argues that the implementation of such wealth redistribution policies would cost America its competitive economic edge.

To relieve the burden of middle-class families, Trump has proposed to bring back factories in the U.S., which is a debatable move since U.S. products will become more expensive and less competitive on the market as a result. On the other hand, Biden’s recovery plans include a holistic strategy to raise standards of living for the middle-class, who he describes as the “backbone of the economy.” Biden plans on raising the federal minimum wage from $7.25 to $15 an hour, reinforcing the Affordable Care Act, and making Medicare available for all Americans from the age of 60 as opposed to 65. On the education front, Biden plans on making public colleges and universities free for families making less than $125,000. Arguing that inclusivity fosters economic growth, Biden wants to offer Puerto Ricans the freedom of choice over their statehood, enabling them equal rights with the rest of mainland America. According to the Economist Intelligence Unit, a European think tank that leans towards Keynesianism, Biden’s thoughts seem reasonable. But, a study conducted by the more conservative Wall Street Journal views his stratagem differently. The Editorial Board suggests that, by raising taxes, said reforms would disincentivize Americans from working. The study forecasts that Biden’s agenda may result in $6,500 less in median household income in the U.S. by 2030.

Conversely, Trump does not plan on implementing any social reform policies. Rather, he intends on sticking with the conservative mainstream to appeal to his electoral base, but also to his supporters and donors since such projects require funds that may strike a raise in tax rates and ultimately, national debt. Should Trump win, one can expect his continued defence of gun rights, opposition of abortion, support of ICE, the death penalty, private prisons, and rejection of publicly accessible healthcare.

Trump and Biden’s stances on environmental and ecological issues follow the same trend of polarized disagreement. Defending the argument that economic recovery is heavily contingent on America’s future environment, Biden wishes to rejoin the Paris Climate Agreement and take steps to counter climate change. While he does not go as far as banning nuclear energy, Biden still stands against fracking, citing serious environmental concerns. Trump, on the opposite end of the spectrum, admits to the existence of global climate change, but highlights the role nature also plays alongside humans. Trump would preserve the status quo, by supporting the oil and gas sector, including controversial methods such as fracking.

Bearing in mind the economic state of the country, and the global economy at large, the top priority of whichever elected President ought to be centred on economic resuscitation in 2021. Trump’s approach focuses on lifting restrictions for businesses, even by freezing payroll taxes, while Biden advocates hefty investments by the public sector; a belief that bears resonances to the Keynesian school of thought. In the past, both economic strategies have been tested in different countries, and have both succeeded and failed, rendering the stakes of this election painfully high for the country with the world’s largest economy.