The global economy faces serious challenges. Inflation is high, exacerbated by Vladimir Putin’s war in Ukraine. Energy markets are turbulent. Supply chains that have not completely healed cause shortages and price increases.
The Americans are anxious. I know this feeling. I grew up in a family where it mattered a lot when the price of fuel or groceries went up. We felt it around the kitchen table. But the American people need to have confidence that our economy is facing these challenges from a position of power.
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In January 2021, when I took office, the recovery stopped and the corona got out of hand. In less than a year and a half, my administration’s economic programs and immunization program have helped achieve the most powerful recovery in modern history. The labor market is the strongest since the post-World War II era, with 8.3 million new jobs, the fastest decline in registered unemployment, and millions of Americans working for better wages.
“US economy in good shape from almost any other country”
Since I took office, families have increased their savings and have fewer debts: a recent Federal Reserve report found that a higher percentage of Americans reported in late 2021 that they felt more financially comfortable than at any time since the 2013 survey began. Business investment has risen by 20% and manufacturing jobs are growing at the fastest rate in 30 years. There were more new applications to open small businesses in 2021 than in any previous year.
The U.S. is in a better economic position than almost any other country. According to the International Monetary Fund, the U.S. economy will be larger by the end of the current year – relative to its pre-epidemic size – than any of the 7 strongest economies. The U.S. economy may grow faster this year than China’s economy, for the first time since 1976.
With the right policies, the US can move from recovery to stability and stable growth, and lower inflation without sacrificing all of these historic achievements. During this transition, growth will look different. Instead, if the creation of an average monthly job moves next year from current levels of 500,000 to something closer to 150,000, it would be a sign that we are successfully moving to the next stage of recovery – as this type of job growth is consistent with a low unemployment rate And a healthy economy.Things should look different even compared to the decades before the plague, when too often we had low growth, low disposable income and an economy that worked best for the richest Americans.
“We have an opportunity to build a historic recovery”
I ran for president because I was tired of the so-called drip economy. We now have an opportunity to build on a historic recovery, with an economy working for working families. The most important thing we can do now to move from a rapid recovery to stable growth is to lower inflation. This is why I have made dealing with inflation my top economic priority. My program has three parts:
First, the Federal Reserve has a primary responsibility to control inflation. My predecessors despised the Fed, and past presidents sought to influence its decisions inappropriately in times of rising inflation. I will not do that. I appointed people from both parties, with high qualifications to lead this institution. I agree with their assessment that the war on inflation is our main economic challenge at the moment.
“We must increase our production capacity over time”
Second, we must take every practical step to make things cheaper for families, in this moment of economic uncertainty – and increase the production capacity of our economy over time. The price of fuel is largely high because Russia’s oil, gas and refining capacity are off the market. We can not give up our global effort to punish Putin for what he has done, and we must moderate those effects for American consumers. This is why I led the largest release in the history of global oil reserves. Congress can help immediately by approving the tax credit on clean energy and investments I have proposed. A dozen CEOs of America’s largest public utility companies told me earlier this year that my plan would reduce the average family’s annual bills by $ 500, and speed up our transition from energy produced by autocrats.
We can also reduce the cost of everyday goods by repairing faulty supply chains, improving infrastructure and stopping the excessive commissions charged by foreign shipping companies for transporting products. My action plan for housing supply will make housing affordable, by building more than a million additional units, and will close the housing shortage for the next five years. We can lower the price of prescription drugs by empowering Medicare to negotiate with drug companies and limit the cost of insulin. And we can lower the cost of caring for children and the elderly to help parents get back to work. I did what I could to help working families during this challenging time – and I will continue to work to reduce costs where I can – but now Congress needs to do the same.
“The deficit will be reduced by $ 1.7 trillion this year”
Third, we need to continue to reduce the federal deficit, which will help ease price pressures. Last week, the non-partisan budget ministry of Congress predicted that the deficit would drop by $ 1.7 trillion this year – the largest drop in history. This will leave the deficit as part of the economy, lower than pre-epidemic levels and lower than the budget expected for this year, before the US bailout program passed. The progress of this deficit was not predetermined. In addition to ending emergency plans responsibly, about half of the deficit reduction is driven by rising revenues – with my economic policies driving a rapid recovery.
My plan will reduce the deficit even further by implementing common sense reforms in tax laws. The IRS should have the resources to collect taxes that Americans already owe. We need to balance the field of international taxation so that companies have no more incentive to move jobs and profits overseas. And the outrageous unfairness in the tax law, which allows a billionaire to pay lower rates than a teacher or firefighter, should be put an end to.
I welcome a discussion around my plan to tackle inflation and drive the economy to steady growth. I have a very different approach from Republicans in Congress, led by Senator Rick Scott, whose plan will raise taxes for people earning less than $ 100,000 and require Congress to re-approve basic programs like Medicare, Social Security and Medicaid every five years. This will make American families poorer and more economically insecure.
The economic policy choices we make today will determine whether a sustained recovery that will benefit all Americans is possible. I will work with anyone – Democrat, Republican or Independent – who is willing to have an open discussion and who will provide real solutions to the American people.