Joe Biden's plan would create 7 million more jobs than Trump, according to one economic forecast
REUTERS/Kevin Lamarque/File Photo
- An economic forecast from Moody's indicated that a Biden presidency would create 7 million more jobs compared to a second Trump term.
- "The Moody's analysis tells us the Biden plan would result in more jobs, a stronger economy, and higher incomes for the middle class," economics expert Michael Linden said.
- Household incomes would also rise nearly $5,000 under Biden, but stay unchanged if Trump is reelected to another term.
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Democratic presidential candidate Joe Biden's economic agenda would lead to 7 million more jobs created compared to President Donald Trump's, according to a new analysis from Moody's Analytics, a research firm.
The study, conducted by Mark Zandi and Bernard Yaros, evaluated the economy's trajectory under four different scenarios. But it found that a Democratic sweep where Biden is elected and Democrats recapture the Senate would lead to a significant increase in federal spending. They assume it would be largely "deficit-financed," meaning the government racks up a bigger federal debt.
The spending, though, wouldn't be a drag on overall growth. Instead, 18.6 million jobs would be created during Biden's first term, and lift the average American's household after-tax income by $4,800. That's 7 million more jobs compared to a scenario where Trump is reelected and Republicans hold onto the Senate. Household incomes largely stay the same should the GOP control both the legislative and executive branches.
Graphic from Moody's Analytics/BEA
"The Moody's analysis tells us the Biden plan would result in more jobs, a stronger economy, and higher incomes for the middle class," Michael Linden, a fellow at the left-leaning Roosevelt Institute, told Business Insider.
The unemployment rate would drop below 4% in late 2022 in a Biden presidency. Under Trump, that would occur in the first half of 2024 — a 1.5 year difference.
The analysis sought to predict the economy's trajectory under several different scenarios, including a period of divided government. Details around Trump's economic plan are scarce, though he has pledged another round of middle-class tax cuts without elaborating, among other measures to aid wealthy investors.
Linden said increasing federal spending helps prop up the economy during a recession.
"Every dollar of additional government spending in the next couple of years is going to produce more than a dollar's worth of new growth and more economic activity, which creates more jobs," Linden said. "The bang for the buck is massive."
He added that Biden's endorsement of policies such as paid family leave and stronger access to childcare also shores up the number of jobs created in the analysis.
Biden has unveiled an ambitious suite of spending proposals that would generate $4 trillion in new revenue over 10 years. He recently incorporated an overhaul of the child tax credit into his economic platform, which would allow parents with children under 17 years old to receive up to $300 in monthly federal payments next year.