Many poles have indicated that Americans believe that Trump is better for the Economy than Biden.   This is largely due to the continued extraordinary claims Trump has made about the success of his economy pre-COVID, and the recovery underway. In fact, he claims to have “built the best economy ever”.   These claims may be persuasive for some, but are not factual.  His first three years (pre-COVID) indicate a growth rate of 2.5%.  This is middle of the pack in historical performance.   However, the real question in front of us at this time, with an election just a month away, is whose policies would be better for the US economy in the coming years?

A highly respected and independent source of economic analysis and modeling is Moody Analytics.    They have carefully modeled four scenarios:

1. A Biden win with Democratic Congress (Blue line)
2. A Trump win with Republican Congress (Red line)
3. A Biden win with split-Congress (Dash-blue)
4. A Trump win with split-Congress (Dash-red

The results show that a Biden win with Democratic Congress is the best case scenario for the US economy, and the worst case scenario is a Trump win with Republican Congress.  The full article can be found via this link, it is definitely worth the read. https://www.moodysanalytics.com/-/media/article/2020/the-macroeconomic-consequences-trump-vs-biden.pdf

The summary economic results can be found in these two charts extracted from the article:

My takeaways from this article include the following:

1. Biden’s policies includes more spending, but generates faster growth, and with low interest rates per FED policy, results in a manageable debt, and later-year growth in economy and thereby tax recovery.  In 2024, a Biden-Dem sweep yields approximately $1 Trillion in addition GDP which is 4.8% better than a Trump-Rep sweep model.
2. Biden’s policies benefit the low and middle-income households with lower taxes and more services at the expense of wealthy households and large corporations.
3. Trump’s polices will result in slower growth and less jobs, and will benefit the wealthy and corporations due to tax cuts, while increasing costs for most Americans through impact of trade policies, and reduction of services used mostly by low and middle-income households.   Furthermore immigration reductions will impact the growth rate as we approach full employment and the impact of age demographics in the US are felt in the middle of the decade.
4. The overall economic advantages of a Biden win and Democratic sweep results in a better performing stock market in the long-run because of the improved economy, and spending capacity of middle-income families.  This outweighs the normally expected impact of taxes on the corporations, and wealthy, because the wealthy are not likely to significantly change their spending and corporations will ramp up with the help of low interest rates to meet additional demand, resulting in improved profitability.

I hope this is useful as you consider the facts and policy differences of the two candidates for President.