Democrats in the U.S. received a clear message in 2024: A strong labor market isn’t enough to win elections. That reality could shape how the government responds to the next economic downturn.
Scarred by the long, slow recovery following the 2007-09 recession, U.S. President Joe Biden and his advisers banked their political fortunes on going big. In early 2021, Democrats pushed through a staggering $1.9 trillion fiscal package meant to bolster hiring and an economy still weathering the uncertainties of the COVID-19 pandemic.
Their bet worked — but not exactly as they hoped. The labor market recovered rapidly and remains solid today, but a surge in inflation soured Americans’ views of the economy, helping to power President-elect Donald Trump to a second term. Republicans placed blame for inflation squarely at Biden’s feet, arguing the Democrat-driven stimulus bill supercharged demand and stoked prices.
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