Fact-checking President Biden on economic growth

Yesterday, President Biden made the following statement:

President Biden was sworn into office on Jan. 20, 2021, about a third of the way through the first quarter of the year. However, data from the Bureau of Economic Analysis, seen in Figure 1, shows that, in fact, real Gross Domestic Product (GDP) actually grew in the two quarters prior to that: by 7.5 percent and 1.1 percent, respectively (and by 33.4 percent and 4.3 percent respectively using the fairly meaningless ‘annualized’ number).

Figure 1: Quarterly real GDP growth

Source: Bureau of Economic Analysis

Indeed, as Figure 2 shows, after an initial crash — which was smaller in the United States than in many comparable countries — the economy had recovered substantially by the end of 2020 so that it was just 2.4 percent smaller in real terms than it had been in the final quarter of 2019.

Figure 2: Real GDP growth, Q4:2019 = 100

Source: Bureau of Economic Analysis

Bluntly put, President Biden isn’t telling the truth when he says that he inherited “stagnation”: he actually inherited an economy that was recovering briskly from a massive, exogenous shock.

It is important to point this out. April’s bad jobs numbers show us that we cannot take a continued recovery for granted. We need policy appropriate to the problems we face — not those of inadequate demand but of constrained supply. If President Biden is allowed to re-write history and paint a picture of a moribund economy revived by a tidal wave of federal spending, none of our economic problems will be solved, they will only be made worse.

The media would have been all over President Trump for a whopper like this. They should be similarly quick and ready to flag up President Biden’s falsehoods.

John Phelan is an economist at the Center of the American Experiment.