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Wednesday, September 11, 2024


Fact Checking the Harris-Trump Debate

In their first debate, and first meeting, the presidential candidates attacked each other on the economy, taxes, immigration and abortion.



By Eugene Kiely, Robert Farley, D'Angelo Gore, Lori Robertson, Jessica McDonald, Saranac Hale Spencer, Alan Jaffe, Kate Yandell, Ben Cohen, Logan Chapman, Sarah Usandivaras and Ian Fox

Posted on September 11, 2024

Summary

The highly anticipated debate between former President Donald Trump and Vice President Kamala Harris was a combative event in which facts were repeatedly trampled and distorted.In a lengthy exchange on the Jan. 6, 2021, attack on the U.S. Capitol, Trump made several statements that were either false, misleading or unsupported, and Harris got a couple of facts wrong, too.Trump referred to a rumor that began on Facebook alleging that immigrants in Springfield, Ohio, were stealing and eating local pets. City police have said there have been “no credible reports” of that kind of activity.Harris claimed Trump intends to enact what in effect is a “sales tax” which she said economists estimate would raise prices on typical American families by almost $4,000 a year. That’s a high-end estimate from a liberal think tank about Trump’s plan for “universal baseline tariffs” on imports.But Trump was also wrong when he claimed Americans would not pay higher prices due to tariffs, and that the higher prices would be borne by the countries the tariffs are levied against. Many nonpartisan economists disagree about the amount that Trump’s proposed tariffs would raise prices for American families, but most agree it would be substantial.Trump falsely claimed that Harris was sent “to negotiate peace” between Russia and Ukraine in February 2022. Days before Russia invaded Ukraine that month, Harris met with Ukrainian President Volodymyr Zelenskky in Germany. She did not meet with Putin, as Trump said.Harris falsely claimed that “Trump left us the worst unemployment since the Great Depression.” When President Joe Biden and Harris took office in January 2021, the unemployment rate was 6.4% — lower than it was during several administrations since the 1930s.Harris and Trump traded jabs on manufacturing job performance in their respective administrations, with each claiming the other lost jobs, but both sides are cherry-picking from the statistics.Trump repeated his unsupported claim that “millions of people” are “pouring into our country from prisons, jails, from mental institutions and insane asylums.” And he said these migrants were “taking jobs” from “African Americans and Hispanics and also unions.” Employment and union membership data show no evidence of that, either.Trump repeated his false claim that everyone — liberals and conservatives — wanted to end Roe v. Wade’s constitutional right to abortion.The former president repeatedly said Democrats, including vice presidential candidate Tim Walz, were in favor of abortion “in the ninth month” — or even after birth. Abortion that late is exceedingly rare, and abortion after birth does not exist. It’s homicide, and it’s illegal.Harris repeated the assertion that Trump “will sign a national abortion ban” if reelected, but Trump said that he does not intend to sign such a ban. Harris also tried to tie Trump to Project 2025’s proposal for mandatory abortion reporting, but Trump has tried to distance himself from the document.The vice president claimed Trump’s economic policies led to “one of the highest” trade deficits in American history. But the annual trade deficits during the Biden administration have exceeded those under Trump.Trump again falsely claimed that fraud was responsible for his loss in the 2020 election, and wrongly claimed that none of his lawsuits making that allegation had been decided on the merits.Trump said Harris “will never allow fracking in Pennsylvania.” When she was running for the 2020 Democratic presidential nomination, Harris did say she was “in favor of banning fracking.” But in an Aug. 29 interview on CNN and at the debate, Harris said, “I will not ban fracking.”Harris claimed that Trump’s tax proposal would “provide a tax cut for billionaires and big corporations, which will result in $5 trillion to America’s deficit.” That’s the estimated 10-year cost of extending all the tax cuts in Trump’s 2017 tax law, but those tax changes benefited people of all income groups.Trump falsely claimed that Harris “has a flat plan to confiscate everybody’s guns.” Harris has not called for taking away all guns, and her campaign said she no longer supports a mandatory buyback program for so-called “assault weapons.”Trump claimed that he had “no inflation” during his presidency, while inflation experienced under Biden has been “probably the worst in our nation’s history.” Inflation was low under Trump, but it wasn’t zero. And while Inflation has risen significantly under Biden, it is far below record levels.Trump made the curious claim that he “saved” the Affordable Care Act, even though he tried, and failed, to repeal and replace it while he was president, and he backed a lawsuit that would have nullified the law.The former president wrongly claimed that “crime in this country is through the roof,” and that FBI data to the contrary is a “fraud” because “they didn’t include the cities with the worst crime.” The latest FBI statistics are based on voluntary reporting from a higher participation of cities than any year during Trump’s presidency.Trump falsely claimed that the number of jobs created during the Biden administration “turned out to be a fraud.” The Bureau of Labor Statistics announced a downward revision in the jobs tally during its routine annual revision of jobs data.Trump wrongly claimed that under his administration, “we had the greatest economy.”Harris claimed that Trump “wants to be a dictator on Day 1,” but the former president has said that he was joking when he said he would be a dictator for one day.Trump repeated a popular talking point, calling Harris the “border czar.” She was never in charge of border security, rather, she was tasked with addressing root causes of migration from three Central American Countries.Trump repeated another familiar claim, wrongly saying that the U.S. had left “$85 billion worth of brand new, beautiful military equipment” when it left Afghanistan.

The debate was hosted by ABC News on Sept. 10.

Analysis


Trump, Harris on Jan. 6 Attack on U.S. Capitol


Co-moderator David Muir kicked off a lengthy back-and-forth between the candidates about the Jan. 6, 2021, attack on the U.S. Capitol when he asked Trump if there is anything “you regret about what you did on that day.”



In his response, Trump made several statements that were either false, misleading or unsupported, and Harris got a couple of facts wrong.

The former president spoke on Jan. 6, 2021, on the Ellipse not far from the Capitol, where members of Congress were gathering to begin the process of accepting the electoral votes that would make Joe Biden president. In his speech, Trump told his supporters that the Democrats stole the election, making numerous false claims about election fraud in swing states, and called on then-Vice President Mike Pence to “do the right thing” and reject electoral votes for Biden, so that Trump could remain president.

He also told his supporters to march to the Capitol. They stormed the building, attacked law enforcement officers and interrupted the counting of the electoral votes, which wasn’t completed until the early hours of Jan. 7, 2021.

In response to Muir, Trump claimed that he had “nothing to do” with the “Save America” rally “other than they asked me to make a speech.” In fact, Trump heavily promoted the rally on social media, telling his followers in one post that a new report proves it was “[s]tatistically impossible to have lost the election” and urging them to attend the Jan. 6 rally. “Be there,” he wrote, “will be wild!”

Trump baselessly claimed that he “went to Nancy Pelosi and the mayor of Washington, D.C.,” Muriel Bowser, and offered to give them “10,000 National Guard or soldiers” for Capitol security. He also falsely claimed that “Nancy Pelosi rejected me,” blaming the then-House speaker for a lack of adequate security.

“It would have never happened if Nancy Pelosi and the mayor of Washington did their jobs,” he said. “I wasn’t responsible for security. Nancy Pelosi was responsible. She didn’t do her job.”

As we have written, the claim that Pelosi is responsible for Capitol security is exaggerated. The speaker appoints one member of the four-member Capitol Police Board, which oversees Capitol security. Then-Senate Majority Leader Mitch McConnell, a Republican, also appointed a member.

As for Trump’s claim that Pelosi turned down his request for 10,000 National Guard troops, the House select committee on the Capitol attack said it found “no evidence” of that. In its report, the committee noted that then-Acting Secretary of Defense Christopher Miller said there was “no direct order from the president” to put 10,000 National Guard troops on the ready.

Trump claimed to have new evidence, citing a tape of Pelosi discussing the attack on the day that it happened. “Her daughter has a tape of her saying she is fully responsible for what happened,” Trump claimed. “They want to get rid of that tape.”

Trump is referring to a video released in June by the House Republicans. In the video, which her daughter took on Jan. 6, 2021, Pelosi can be seen questioning the security plans and taking some responsibility for not making sure that security was adequate.

“We have responsibility, Terri. We did not have any accountability for what was going on there, and we should have,” she said. “Why weren’t the National Guard there to begin with?” When someone in the car said that security officials thought they had sufficient coverage, Pelosi angrily responded, “They clearly didn’t know, and I take responsibility for not having them just prepare for more.”

In the video, Pelosi did not say that Trump offered to provide the Capitol with 10,000 National Guard troops, and she did not say, as Trump claimed, that “she is fully responsible for what happened.”

When asked to respond, Harris recalled being at the Capitol that day — but got some facts wrong.

“On that day, 140 law enforcement officers were injured and some died, and understand the former president has been indicted and impeached for exactly that reason,” Harris said.

Harris is correct that 140 law enforcement officers were injured on Jan. 6, 2021, but she was wrong to suggest “some died” that day. As we wrote, none of the officers who provided protection at the Capitol on Jan. 6 died that day, although five officers did die in the days and months after the riot — including one that died the next day after suffering two strokes. Four other police officers committed suicide.

Harris also went too far when she said Trump “has been indicted and impeached for exactly that reason,” referring to the Jan. 6, 2021, attack.

The violent attack on the Capitol was the reason for his second impeachment, which charged him with “inciting violence against the Government of the United States.” But it wasn’t the reason for the federal indictment. In that case, as we have written, Trump was charged with four counts: conspiracy to defraud the United States, conspiracy to obstruct an official proceeding, obstruction of and attempt to obstruct an official proceeding, and conspiracy against rights. Notably absent from the indictment, the New York Times reported, was “any count that directly accused Mr. Trump of being responsible for the violence his supporters committed at the Capitol on Jan. 6, 2021.”

Harris also went on to misleadingly claim that Trump is again threatening violence. “Donald Trump, the candidate, has said, in this election, there will be a bloodbath if this and the outcome of this election is not to his liking,” she said. As we have written, Trump made his “bloodbath” remark at a March 16 rally in Ohio, while warning of China building auto manufacturing plants in Mexico that will cause a hemorrhaging of U.S. auto jobs. A campaign spokesperson told the Washington Post that Trump was referring to “an economic bloodbath for the auto industry and autoworkers” if he loses the election.
Falsehood About Immigrants Eating Pets

In the midst of commenting on immigration, Trump referenced a debunked rumor that has been circulating widely on social media this week.

Referring to immigrants in a southwestern Ohio city, the former president said, “In Springfield, they’re eating the dogs, the people that came in, they’re eating the cats. They’re eating, they’re eating the pets of the people that live there.”

But, according to the Springfield News-Sun, the rumor began in a local Facebook group. “The original poster did not cite first-hand knowledge of an incident,” the newspaper reported. “Instead they claimed that their neighbor’s daughter’s friend had lost her cat and found it hanging from a branch at a Haitian neighbor’s home being carved up to be eaten.”

City police have said that there’s no evidence to support the claims.

“In response to recent rumors alleging criminal activity by the immigrant population in our city, we wish to clarify that there have been no credible reports or specific claims of pets being harmed, injured or abused by individuals within the immigrant community,” the Springfield police said in a statement provided to several news outlets this week.

And, in an unusual move, one of the debate moderators, Muir, provided some live fact-checking, saying, “ABC News did reach out to the city manager there. He told us there had been no credible reports of specific claims of pets being harmed, injured or abused by individuals within the immigrant community.”

Indeed, on Sept. 9, Springfield City Manager Bryan Heck provided the same statement as the police to ABC News, and said, “Additionally, there have been no verified instances of immigrants engaging in illegal activities such as squatting or littering in front of residents’ homes. Furthermore, no reports have been made regarding members of the immigrant community deliberately disrupting traffic.”

Even though there’s no evidence to support the claim, it has been amplified by Trump’s running mate, Sen. J.D. Vance, who posted on X on Sept. 9, “Reports now show that people have had their pets abducted and eaten by people who shouldn’t be in this country. Where is our border czar?”

He backtracked the following day, posting on the same platform: “It’s possible, of course, that all of these rumors will turn out to be false.”
Tariffs

Harris claimed Trump intends to enact what in effect is a “sales tax,” which she said economists estimate would raise prices on typical American families by $4,000 a year. That’s a high-end estimate from a liberal think tank about Trump’s plan for “universal baseline tariffs” on imports.

But Trump was also wrong when he claimed Americans would not pay higher prices due to tariffs, and that the higher prices would be borne by the countries the tariffs are levied against. Many nonpartisan economists disagree about the amount that Trump’s proposed tariffs would raise prices for American consumers, but most agree it would be substantial.

According to Harris, her opponent “has a plan that I call the Trump sales tax, which would be a 20% tax on everyday goods that you rely on to get through the month.” She said, “Economists have said that that Trump sales tax would actually result for middle-class families in about $4,000 more a year.”

As we’ve written, Trump has been inconsistent and opaque about what exactly he is proposing, but most often he has talked about a 10% across-the-board import tax combined with a 60% tariff on Chinese goods. On other occasions, he has floated a baseline tariff as high as 20%.

The estimate cited by Harris, $4,000, comes from a liberal think tank, the Center for American Progress Action Fund, based on a 20% across-the-board import tax combined with a 60% tariff on Chinese goods.

Other nonpartisan groups have come in with lower estimates. Based on a 10% worldwide tariff and a 60% tax on imported Chinese goods, the Tax Policy Center estimated a more modest $1,350 cost to middle-income households. Using those same parameters, an analysis from the Peterson Institute for International Economics concluded Trump’s proposed tariffs would cost a typical middle-income household about $1,700 in increased expenses each year. The Tax Foundation estimates such tariffs would amount to an annual tax increase on U.S. households of $625.

So Harris has taken advantage of Trump’s inconsistent comments about the amount of his proposed universal tariffs to provide a high estimate of its cost to Americans. But Trump’s claim that his tariffs wouldn’t cost Americans at all is misleading.

Americans are “not going to have higher prices,” Trump said. “Who’s going to have higher prices is China and all of the countries that have been ripping us off for years.”

As we noted above, economists say American consumers, at least in the short term, would see higher prices due to a universal tariff.

As Erica York, senior economist and research director with the Tax Foundation’s Center for Federal Tax Policy, told us earlier this year, “When the U.S. imposes a tariff, the person in the United States who is importing the good pays a tax to the U.S. government when they import the foreign goods. U.S. tariffs are taxes on U.S. consumers of foreign goods that must be paid by the importer of the good.”
Harris Did Not Negotiate Ukraine-Russia Peace

During an exchange about U.S. support for Ukraine, Trump falsely claimed that Harris was tasked with negotiating peace between Ukraine and Russia and their respective presidents.

“Nobody likes to talk about it, but just so you understand, they sent her to negotiate peace before this war started,” Trump said of Harris. “Three days later, [Russian President Vladimir Putin] went in and started the war because everything they said was weak and stupid. They said the wrong things. That war should have never started. She was the emissary. They sent her in to negotiate with [Ukrainian President Volodymr] Zelenskyy and Putin.”

That’s not what happened. As we’ve written, in February 2022, Harris traveled to Germany for the annual Munich Security Conference to talk with European leaders about world topics, including Russian aggression toward Ukraine.

In a Feb. 19 speech, she warned that the U.S. and its allies would “impose significant and unprecedented economic costs” if Russia attacked Ukraine. She also had in-person meetings with several heads of state, including Zelenskyy and the leaders of Latvia, Lithuania and Estonia.

But Harris did not negotiate peace between Putin and Zelenskyy. Russia reportedly did not send a representative to the security conference that year, and Harris also did not travel to Russia to meet with Putin.

“To be honest, I can’t remember a single contact between President Putin and Ms. Harris,” Dmitry Peskov, a spokesperson for Putin, said in July when asked whether Putin had ever talked with Harris.

Prior to the Munich conference, U.S. officials had been warning that Russia planned an invasion of Ukraine. In a Feb. 18, 2022, presser, Biden said, “We have reason to believe the Russian forces are planning to and intend to attack Ukraine in the coming week — in the coming days.” Then Russia launched its invasion on Feb. 24.
Harris Wrong About Unemployment

While talking about what the Biden-Harris administration inherited from the Trump administration, Harris falsely claimed that “Trump left us the worst unemployment since the Great Depression.”

During the COVID-19 pandemic in 2020, the U.S. unemployment rate peaked at 14.8% in April, as businesses and other services shut down to try to slow the spread of the coronavirus. But the economy had begun to recover by the time Biden and Harris took office in January 2021, when the unemployment rate had declined to 6.4%, according to the Bureau of Labor Statistics.

That was not the highest unemployment rate since the Great Depression, which followed the stock market crash of 1929. The unemployment rate was higher than 6.4% for 65 consecutive months from October 2008 until March 2014, which included periods under Presidents George W. Bush and Barack Obama. The highest rate during that period was 10% in October 2009, a few months after the “Great Recession,” which began in December 2007, ended in June 2009.

Before then, the unemployment rate had reached as high as 10.8% under President Ronald Reagan in November and December 1982.
Manufacturing Jobs

Harris boasted that the U.S. has “created over 800,000 new manufacturing jobs, while I have been vice president. … Donald Trump said he was going to create manufacturing jobs. He lost manufacturing jobs.” Trump countered that “they lost 10,000 manufacturing jobs this last month.”

As we wrote recently, both are cherry-picking data points.

The economy added 462,000 manufacturing jobs in Trump’s first two years in office, according to the Bureau of Labor Statistics, and then lost 43,000 in his third year, before the pandemic-fueled recession hit.

The economy then shed nearly 1.4 million manufacturing jobs in the first few months of the pandemic, a little more than half of which returned before Trump left office. So Harris is correct that there was a net loss of manufacturing jobs – 178,000 — over Trump’s full term, but the vast majority of job losses under Trump were due to the global pandemic.

As of August, the U.S. has added 739,000 manufacturing jobs under Biden and Harris — short of the 800,000 mentioned by Harris. (And those numbers may soon change in ways that will markedly change the Biden administration’s record. Preliminary estimates of annual revisions to the number of jobs created over the 12 months ending in March indicate that the BLS’ monthly estimates may have overshot manufacturing jobs by 115,000.) As for Trump’s claim that “they lost 10,000 manufacturing jobs this last month,” that’s actually an undersell. BLS data show a loss of 24,000 manufacturing jobs between July and August, and a net decline of 39,000 this year.

In other words, the trend under both Trump and Biden followed a similar pattern: two years of growth following an economic downturn, followed by job losses in the third year.
No Evidence for ‘Prisons,’ ‘Mental Institutions’ Claim

Echoing a whopper of a claim he has been making since last year, Trump claimed that “millions of people” crossing the southern border illegally are “pouring into our country from prisons, jails, from mental institutions and insane asylums.”

Immigration experts told us there’s simply no evidence for that. One expert said Trump’s claim appeared to be “a total fabrication.”

Trump has repeated the claim many times, but he hasn’t provided any credible support for it.

In June, we looked into Trump’s claim as it relates to Venezuela, because he has repeatedly linked a drop in crime there with his claim about countries emptying their prisons and sending inmates to the U.S. Once again, during the debate, Trump stated: “Do you know that crime in Venezuela and crime in countries all over the world is way down? You know why? Because they’ve taken their criminals off the street and they’ve given them to her to put into our country,” referring to Harris. Reported crime is trending down in Venezuela, but crime experts in the country say there are numerous reasons for that and they have nothing to do with sending criminals to the U.S.

“We have no evidence that the Venezuelan government is emptying the prisons or mental hospitals to send them out of the country, whether to the USA or any other country,” Roberto Briceño-León, founder and director of the independent Venezuelan Observatory of Violence, told us.

He said the drop in crime is partly due to worsening economic and living conditions, which have caused nearly 8 million people to leave the country since 2014. The vast majority have settled in nearby South American countries.

Trump also claimed that those coming into the country were “taking jobs that are occupied right now by African Americans and Hispanics and also unions.” We previously found no evidence for that, either, in employment and union membership data.
Overturning of Roe v. Wade

In discussing abortion, Trump once again repeated his false claim that everyone wanted to end Roe v. Wade’s constitutional right to abortion.

“Every legal scholar, every Democrat, every Republican, liberal, conservative, they all wanted this issue to be brought back to the states where the people could vote — and that’s what happened,” he said, also incorrectly crediting six justices on two occasions.

In 2022, after Trump appointed three conservative judges to the court, the Supreme Court overturned the 1973 decision in a 5-4 ruling, immediately putting in place restrictions on abortion in nearly half of states. Since then, as Trump went on to note, several states have voted to enshrine abortion rights in their state constitutions or reject further restrictions.

Experts have previously told us that Trump’s claim is “utter nonsense” and “patently absurd.” Contrary to his claim, most Americans opposed the ending of Roe v. Wade. And even though some scholars have been critical of some of the legal reasoning in the decision, many did not wish to end Roe.
No Abortions ‘After Birth’

In casting his opponent as “radical” on abortion, Trump repeatedly claimed Democrats support abortion “in the ninth month” or later.

“They have abortion in the ninth month,” he said, before alluding to misconstrued comments by former Virginia Gov. Ralph Northam. “He said, the baby will be born and we will decide what to do with the baby. In other words, we’ll execute the baby.” (Trump initially misidentified him as the former governor of West Virginia.)

“Her vice presidential pick says abortion in the ninth month is absolutely fine,” Trump continued, referring to Walz. “He also says, execution after birth. It’s execution, no longer abortion, because the baby is born.”

Trump hit the same point again later, again invoking Northam. “You could do abortions in the seventh month, the eighth month, the ninth month, and probably after birth,” he said. “Just look at the governor, former governor of Virginia. The governor of Virginia said, we put the baby aside, and then we determine what we want to do with the baby.”

As the moderator noted, no state allows people to kill babies after birth. That would be infanticide, and it’s illegal.

Some states do not have gestational limits on abortion, including Minnesota. Last year, Gov. Walz signed a bill protecting abortion following 2022’s overturning of Roe v. Wade. The law eliminated nearly all restrictions on abortion, including gestational limits.

It also removed a requirement that medical personnel “preserve the life and health” of an infant born alive as the result of an abortion. As one obstetrician explained in an editorial in the Minnesota Star Tribune, this is so that parents of a dying infant can hold their baby and say goodbye, and not be forced to watch while the child receives futile medical intervention (the law still requires the infant be given proper medical care and be “fully recognized as a human person and accorded immediate protection under the law”).

Most abortions are performed early in pregnancy. According to the latest statistics from the Centers for Disease Control and Prevention, which are for 2021, 80.8% of abortions were performed at or before nine weeks of gestation, and 93.5% were performed at or before 13 weeks. Fewer than 1% were performed at 21 weeks or later. The figures are voluntarily reported and apply to legal abortions in 48 reporting areas in the U.S. (D.C, New York City and all states except for California, Maryland, New Hampshire and New Jersey).

In Minnesota, 88% of induced abortions occurred at or before 12 weeks of pregnancy in 2022, according to the latest available data from the Minnesota Department of Health. No abortions occurred in the ninth month.

Trump’s references to Northam are distortions of comments the former governor made in a radio interview in 2019. Trump has previously misrepresented the comments in his State of the Union address that year.

In the interview, Northam, who is a physician, said third-trimester abortion is “done in cases where there may be severe deformities. There may be a fetus that’s nonviable. So in this particular example, if a mother’s in labor, I can tell you exactly what would happen. The infant would be delivered, the infant would be kept comfortable, the infant would be resuscitated if that’s what the mother and the family desired. And then a discussion would ensue between the physicians and the mother.”

Northam later clarified that he was not suggesting infanticide, and a spokesperson said Northam was “focused on the tragic and extremely rare case in which a woman with a nonviable pregnancy or severe fetal abnormalities went into labor.”
Trump’s Stance on National Abortion Ban, Pregnancy Monitoring

As she has said before, Harris predicted that Trump “will sign a national abortion ban” if reelected. But Trump has said this year and stated again during the debate that he would not sign such a ban.

“It’s a lie,” Trump said in response to Harris’ debate claim. “I’m not signing a ban, and there’s no reason to sign a ban, because we’ve gotten what everybody wanted” — for abortion “to be brought back into the states.” Trump was referring to the Supreme Court ruling in 2022 that overturned Roe v. Wade.

He later again denied plans to sign a national abortion ban, saying, “And as far as the abortion ban, no, I’m not in favor of [an] abortion ban, but it doesn’t matter, because this issue has now been taken over by the states.”

But it does matter if Congress sends a national abortion ban bill to the next president’s desk. Trump did say during his first presidential campaign and presidency that he would support a federal ban on abortion past 20 weeks in most cases, and he has reportedly more recently privately expressed support for a 16-week abortion ban.

Harris also referenced Project 2025, a conservative document Trump has tried to distance himself from. “Understand, in his Project 2025 there would be a national abortion — a monitor that would be monitoring your pregnancies, your miscarriages,” Harris said.

As we’ve written previously, Project 2025 does propose mandatory reporting from states to the Centers for Disease Control and Prevention on miscarriages and abortions. But Trump’s campaign has said that Project 2025 “should not be associated with the campaign.” Trump has recently claimed to “know nothing” about Project 2025, although parts of it were written by former members of his administration.

When asked in April about whether states with abortion bans “should monitor women’s pregnancies so they can know if they’ve gotten an abortion after the ban,” Trump said such monitoring should be left up to the individual states.
Trade Deficit Higher Under Biden

Moderator Muir asked Harris about the Biden administration’s decision to keep in place a number of the tariffs levied by Trump on other countries.

Harris responded: “Well, let’s be clear that the Trump administration resulted in a trade deficit — one of the highest we’ve ever seen in the history of America.”

But as we previously wrote, the trade deficit under the Biden administration has exceeded the deficit during Trump’s term.

As of May, the U.S. goods and services deficit over the previous 12 months was $799.3 billion, according to data published in early July by the Bureau of Economic Analysis. The trade deficit that period was about $145.6 billion higher, or about 22.3% more, than in 2020, when Trump was president. The trade deficit in 2020 was the highest annual deficit under Trump, at $653.7 billion.
Trump Refuses to ‘Acknowledge’ 2020 Loss

Trump lost the 2020 presidential election. In the popular vote, Biden received a total of 81 million votes to Trump’s 74 million. In electoral votes, Biden garnered 306 to Trump’s 232.

But the former president has continued to spread disinformation undermining the integrity of the election, saying that he would have won if there hadn’t been widespread fraud.

Debate moderator Muir asked Trump, “Are you now acknowledging that you lost in 2020?”

“No, I don’t acknowledge that at all,” Trump responded, going on to wrongly claim that his election-related lawsuits were rejected on a “technicality.”

“They said we didn’t have standing,” Trump claimed.

But a list of lawsuits alleging fraud in the 2020 election, compiled by the nonpartisan Campaign Legal Center, shows several cases that were decided on the merits — including some brought by the Trump campaign.

And, as we have written, local, state and federal judges have said that Trump’s lawyers provided no evidence of fraud.

For example, Bucks County Court of Common Pleas Judge Robert Baldi in Pennsylvania rejected the Trump campaign’s attempt to toss out absentee ballots in Bucks County, a suburb of Philadelphia. In doing so, Baldi, a Republican, wrote “that there exists no evidence of any fraud, misconduct, or any impropriety with respect to the challenged ballots.” The Trump campaign appealed, but Commonwealth Court Judge Renée Cohn Jubelirer upheld the lower court ruling and also noted that Trump’s lawyers made “absolutely no allegations of any fraud.”

Trump’s own election security officials at the time also called the 2020 election “the most secure in American history.”
Fracking

Trump repeatedly said that Harris would ban fracking, or hydraulic fracturing, a technique that uses water, sand or chemicals to extract oil and natural gas from underground rock formations. Harris said she would not.

Fracking can impact the environment, including potential contamination of groundwater, according to the U.S. Geological Survey.

“She will never allow fracking in Pennsylvania,” Trump said during the debate in Philadelphia. “If she won the election, fracking in Pennsylvania will end on day one.”

Moderator Linsey Davis also asked Harris about how her position has changed on fracking. Responding to Davis, Harris said, ”Let’s talk about fracking, because we’re here in Pennsylvania. I made that very clear in 2020 I will not ban fracking. I have not banned fracking as vice president of the United States, and in fact, I was the tie-breaking vote on the Inflation Reduction Act, which opened new leases for fracking. My position is that we have got to invest in diverse sources of energy so we reduce our reliance on foreign oil.”

But when she was a candidate in the 2020 race for president, Harris said that she was opposed to fracking. During a September 2019 CNN town hall, Harris was asked by a climate activist if she would commit to a federal ban on fracking because of environmental concerns for local communities. Harris answered, “There’s no question I’m in favor of banning fracking, so yes.”

Harris didn’t exactly make her position clear in 2020, as she said in the debate. Instead, in the 2020 vice presidential debate, she said, “Joe Biden will not ban fracking.”

More recently, in an Aug. 29 interview with CNN’s Dana Bash, Harris said, “As vice president, I did not ban fracking. As president, I will not ban fracking.”

The Inflation Reduction Act does not refer specifically to fracking, but it does open up federal land to oil and gas leases, which would involve the use of fracking to extract natural gas on some of that land.
Trump Tax Cuts

Harris misleadingly claimed that Trump’s tax proposal seeks to “provide a tax cut for billionaires and big corporations, which will result in $5 trillion [added] to America’s deficit.”

That’s the estimated 10-year cost of extending all the tax cuts in Trump’s 2017 tax law, but those tax changes benefited people of all income groups.

As we’ve written, the vice president is referring to a 10-year cost estimate of extending all the income and corporate tax cuts included in the Tax Cuts and Jobs Act, which Trump signed in December 2017. If Congress does not act, many of the tax cuts, including the individual income tax cuts, will expire after 2025. Trump has proposed keeping them.

But extending the tax cuts would not just benefit large corporations and billionaires, as Harris suggested.

Howard Gleckman, a senior fellow at the Tax Policy Center, wrote in a July 8 blog item that it would cost an estimated $4 trillion over 10 years to extend the TCJA’s expiring tax cut provisions. If that happens, less than half — about 45% — of the tax cut benefits would go to taxpayers earning $450,000 or more, Gleckman said.

For example, under the TCJA, the child tax credit doubled from $1,000 to $2,000 per child, and the first $1,400 was made refundable, meaning the credit could reduce a family’s tax liability to zero and it would still be able to receive a tax refund, according to a Tax Policy Center analysis. The income cutoff for the child tax credit, or CTC, also increased from $110,000 to $400,000 for married couples filing jointly. Those earning less than $400,000 also benefit from changes made in 2017 to the individual tax rates and brackets — which also will expire after 2025 unless Congress acts.

Overall, the Tax Policy Center’s distributional analysis found that the tax burden of a typical household in the middle income quintile would decrease by 1.1% should Congress extend the TCJA’s provisions, as compared with a 1.7% decrease in the tax burden for a typical household in the top income quintile.
False Gun Confiscation Claim

Harris, Trump claimed, “has a flat plan to confiscate everybody’s guns.” That’s false. Harris has no such plan.

In 2019, during her first campaign for president, Harris said that she would support a mandatory buyback program for so-called “assault weapons” — but not all firearms.

“There are certain types of weapons that should not be on the streets of a civil society,” Harris said, referring to assault weapons, which she called “weapons of war,” in a November 2019 NBC News interview, for example. While Harris still supports a ban on purchasing assault weapons, her campaign told us that, as of 2024, she is no longer advocating that Americans be required to give up the assault weapons that they previously purchased.
Inflation

Trump made false claims about inflation during his tenure in office and Biden’s.

During an exchange over Trump’s proposed tariff policy, the former president said that under his administration there was “no inflation, virtually no inflation,” and that the current administration “had the highest inflation perhaps in the history of our country.”

Inflation was low during Trump’s presidency, but it wasn’t zero.

As we wrote in “Trump’s Final Numbers,” the Consumer Price Index rose 7.6% under Trump — an average of 1.9% in each of his four years in office. That continued a long period of low inflation, including during the Obama administration (1.8% annual average) and under George W. Bush (2.4% average).

It isn’t true that under Biden the U.S. has experienced inflation “like very few people have ever seen before. Probably the worst in our nation’s history,” as Trump claimed.

The largest 12-month increase in the Consumer Price Index occurred from June 1919 to June 1920, when the CPI rose 23.7%, according to the Bureau of Labor Statistics in a 2014 publication marking the 100th anniversary of the agency’s tracking price changes.

Under Biden, the biggest increase occurred during a 12-month period ending in June 2022, when the CPI rose 9.1% (before seasonal adjustment). BLS said it was the biggest increase since the 12 months ending in November 1981.

Inflation has cooled since then. More recently, the CPI rose 2.9% in the 12 months ending in July, according to the BLS.

Altogether under Biden’s presidency, the CPI has risen 19.4%.
Affordable Care Act

Trump made the curious claim that he “saved” the Affordable Care Act, even though he tried, and failed, to repeal and replace it while he was president. His administration also supported a lawsuit that would have nullified the entire law.

The Supreme Court ultimately ruled in 2021 that the plaintiffs didn’t have standing to bring the suit.

If he “saved” the ACA, it was not for lack of trying to end it.

In the debate, moderator Davis asked Trump about his recent statement that, if elected, he would keep the ACA, known as Obamacare, “unless we can do something much better.” Davis asked if Trump had a plan to replace the law.

Trump said, “I have concepts of a plan” that “you’ll be hearing about it in the not too distant future” and that “I would only change it if we come up with something that’s better and less expensive.”

The former president has made similar comments before. During the 2020 campaign, he said, “What we’d like to do is totally kill it, but come up — before we do that — with something that’s great.” He has yet to release a replacement plan for the ACA.

What’s “better” is a matter of opinion, of course. One of the main provisions of the ACA is that it prohibits insurers from denying coverage or charging people more based on their preexisting health conditions, provisions that most notably have affected those seeking to buy their own coverage on the individual market. Trump has expressed support for preexisting conditions protections, but his record shows he has backed ideas that would weaken the law’s provisions.

Trump supported a 2017 GOP bill that would have included some, but not all, of the ACA’s protections for those with preexisting conditions. He also pushed the expansion of cheaper short-term health plans that wouldn’t have to abide by the ACA’s prohibitions against denying or pricing coverage based on health status.

In late September 2020, Trump signed an executive order that made the general proclamation: “It has been and will continue to be the policy of the United States … to ensure that Americans with pre-existing conditions can obtain the insurance of their choice at affordable rates.” He said the order put the issue of preexisting conditions “to rest.”

It did not. Karen Pollitz, who was then a senior fellow at KFF, told us at the time that the order was “aspirational” and had “no force of law.”

Despite Trump’s comments that he may still replace the ACA, several top Republicans have said the issue is a non-starter in Congress.
Crime

Trump wrongly claimed that “crime in this country is through the roof,” and that FBI data to the contrary is a “fraud” because “they didn’t include the cities with the worst crime.” FBI data for 2023 is based on reporting from a higher participation of cities than any year during Trump’s presidency, and the figures show violent crime is trending down.

As we have written, in Trump’s last year in office — 2020 — murders and violent crime went up, and there was a smaller increase the following year, Biden’s first year in office. But since then, murders and violent crime have been dropping.

The FBI 2022 annual report showed a slight decline in the nationwide murder rate and a larger drop in the violent crime rate between 2020 and 2022. Preliminary FBI figures for 2023 and the first quarter of 2024 show further declines in violent crimes and murders. The 2023 figures are based on data from voluntary reports by 79% of law enforcement agencies in the U.S., representing higher participation than any year during Trump’s presidency.

The final numbers and information about nationwide crime rates, which are adjusted for population, won’t be available until the FBI’s annual crime report is released in October.

The trend in the FBI reports is backed by other credible sources as well.

AH Datalytics’ analysis of data about homicides from more than 200 large U.S. cities showed homicides declined by about 12% in 2023, crime analyst Jeff Asher, co-founder of AH Datalytics, told us in May. Its data show murders have continued to drop this year overall. The FBI data also track with a large decline in shooting victims in 2023 documented by the Gun Violence Archive.

The latest figures from the Major Cities Chiefs Association also show a decline in murders and violent crime. The number of murders went down by 17% from the first half of 2023 to the first half of 2024 in 69 large U.S. cities that provided data.

And finally, the Council on Criminal Justice’s mid-year 2024 crime report representing data from 39 cities found: “Overall, most violent crimes are at or below levels seen in 2019, the year prior to the onset of the COVID pandemic and racial justice protests of 2020. There were 2% fewer homicides during the first half of 2024 than during the first half of 2019 and 15% fewer robberies. Aggravated assaults and domestic violence incidents also are below levels seen five years ago.”
It’s Not Fraud, It’s Routine Revisions

After falsely claiming the FBI crime data are fraudulent, Trump claimed the “number of 818,000 jobs that they said they created turned out to be a fraud.” The jobs data isn’t fraudulent, either.

The Bureau of Labor Statistics last month announced that it would likely revise monthly employment figures based on more comprehensive data — a routine revision it does every year.

“There’s no evidence whatsoever of any manipulation or padding,” David Wilcox, a senior fellow at the Peterson Institute for International Economics and director of U.S. economic research at Bloomberg Economics, told us when we wrote about Trump’s claims in August. He called the BLS’ recent announcement “completely formulaic,” as it reflected the same pattern of how the BLS has been revising the job figures over many years.

As we’ve written, the BLS publishes monthly employment figures that come from a survey of more than 100,000 employers. Later, it obtains more comprehensive data from state unemployment insurance tax filings that employers submit to determine what taxes they owe to unemployment benefit programs. Once a year, the BLS adjusts its monthly estimates based on those state filings.

This year, the BLS announced on Aug. 21 a preliminary estimate that the number of jobs created over the 12 months ending in March would likely be adjusted downward by 818,000 jobs. That’s an adjustment of -0.5% to the March level of employment, larger than the average revision over the last 10 years. There have been other large revisions in the past, however.

The annual revision for 2019, under Trump, was a reduction of 514,000 jobs, or -0.3% of the initial March 2019 employment estimate. The 2009 revision was a reduction of 902,000, or -0.7% of the original March 2009 estimate.

BLS’ final estimate for the year ending in March 2024 will be issued in February 2025, when the January employment report is released. That’s when the final revisions have been issued each year dating back to 2004.

The U.S. has added 15.8 million jobs under Biden. An 818,000 downward revision would drop that number to about 15 million.
More Repeats

The candidates repeated several other claims we have fact-checked before:

Economy. Trump revisited one of his commonly repeated claims, saying at the beginning of the debate that, under his administration, “we had the greatest economy.”

But the U.S. didn’t have “the greatest economy” under Trump. Economists look to real (inflation-adjusted) gross domestic product growth to measure economic health, and that figure exceeded Trump’s peak year of 3% growth more than a dozen times before he took office.

Every president since the 1930s except for Barack Obama and Herbert Hoover has seen a year with at least 3% growth in GDP.

Dictator. The vice president repeated one of her favorite talking points when she claimed Trump “wants to be a dictator on Day 1.” He said he was joking when he said he wouldn’t be a dictator “except for Day 1.”

Harris was referring to a comment that Trump made at a Fox News town hall in December. At the event, Sean Hannity gave Trump the chance to respond to critics who warned that Trump would be a dictator if elected to a second term. “Under no circumstances, you are promising America tonight, you would never abuse power as retribution against anybody,” Hannity said. Trump responded, “Except for Day 1.”

Trump went on to say, “We’re closing the border. And we’re drilling, drilling, drilling. After that, I’m not a dictator.”

Trump later claimed he was joking with Hannity. In a Feb. 4 interview with Fox News’ Maria Bartiromo, Trump said: “It was with Sean Hannity, and we were having fun, and I said, ‘I’m going to be a dictator,’ because he asked me, ‘Are you really going to be a dictator?’ I said, ‘Absolutely, I’m going to be a dictator for one day.’ I didn’t say from Day 1.”

Trump told Bartiromo his “dictator” comment was “said in jest.”

Border czar. Trump falsely claimed Harris is the “border czar.” She’s not.

As we have written, Biden in March 2021 tasked Harris with leading efforts to address the root causes of migration from El Salvador, Guatemala and Honduras. The Central American initiative, known as the “Roots Causes Strategy,” seeks to deter migration from those countries by, among other things, providing funds for natural disasters, fighting corruption, and creating partnerships with the private sector and international organizations.

Harris was not put in charge of U.S. border security, as the “border czar” title implies. That is the responsibility of the secretary of the Department of Homeland Security.

Afghanistan. If Trump had been president during the U.S. withdrawal from Afghanistan, he said, “We wouldn’t have left $85 billion worth of brand new, beautiful military equipment behind.”

But that’s a gross exaggeration. That figure — actually $82.9 billion — was the total amount spent on the Afghanistan Security Forces Fund since the war began in 2001. But it wasn’t all for military equipment, and most of the equipment purchased in those two decades had become inoperable, relocated, decommissioned or destroyed.

CNN reported in April 2022 that a Department of Defense report said $7.12 billion of military equipment the U.S. had given to the Afghan government was in Afghanistan after the U.S. withdrawal.

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Wednesday, August 28, 2024

A terrible system: now what’s the alternative?

AUGUST 26, 2024

Mike Phipps reviews The Invisible Doctrine: The Secret History of Neolberalism (and How It Came to Control Your Life), by George Monbiot and Peter Hutchison, published by Allen Lane.

Is there anything new to say about neoliberalism? It depends, of course, on how you define the capitalist mode of production that it’s based on. Monbiot and Hutchison have a distinctive definition:

“Capitalism is an economic system founded on colonial looting. It operates on a constantly shifting and self-consuming frontier, on which both state and powerful private interests use their laws, backed by the threat of violence, to turn shared resources into exclusive property and to transform natural wealth, labour and money into commodities that can be accumulated.”

The rest of the chapter illustrates this process, beginning with Portuguese colonisation and exploitation from the 15th century onwards.

Global looting allowed countries to stoke their own industrial revolutions at home. One analysis suggests that Britain, over 200 years, extracted from India alone an amount of wealth equivalent to $45 trillion in today’s money. The process continues today in different forms: an estimated trillion dollars a year flows out of poorer countries, through tax evasion and the transfer of money within corporations.

Monbiot and Hutchison take us through the history of neoliberalism from its origins to its global hegemony from the 1980s on. For all the attempts of Bill Clinton and Tony Blair to articulate a ‘Third Way’, this was “little more than a rhetorical device to justify and disguise the capitulation of the left.” Deregulation, privatisation, the weakening of organised labour and the welfare state have continued with little interruption since. In many countries, these ‘reforms’ have been imposed by force.

With increasing privatisation, the opportunities for getting unearned income – rent – have soared. This process reinforces itself, which the authors illustrate with the example of the ending of student grants in many countries. Instead, reliance on loans and the accumulation of debt forces students to restrict their career options, turning to the corporate world for higher salaries, rather than considering public service.

Governments – Keir Starmer’s is the latest example – are in thrall to powerful wealthy elites and shun redistribution, hoping to fund public services through growth. Not explored here are the compromises – environmental, especially – that such a strategy entails.

The impact of neoliberalism on democracy is also a huge cause for concern. The shift in power from elections and parliaments to corporate lobbyists, trade treaties and offshore tribunals has created a crisis of representation, opening the path to cynicism and authoritarianism. Economic and political liberalism are increasingly in conflict.

Trump may have promised to “drain the swamp” of political lobbyists in 2016, but in office he became their tool, particularly of ‘dark money’. In fact, neoliberalism has a history of finding populist figures – even clowns, such as Italy’s Berlusconi, Argentina’s Milei or our own Johnson – to whip up a smokescreen for its ruthless agenda.

Meanwhile, behind the scenes, unpopular lobbies increase their power. One feature of this is the ‘polluter’s paradox’, whereby the most damaging anti-social companies invest most in political lobbying, because they are the ones most likely to face the heaviest regulation in a democratic system; in the process, they come to dominate politics. This helps explain the  “sustained failure by wealthy and technologically advanced governments to prevent our rush towards disaster.”

Neoliberalism’s extreme individualism also attacks our mental health. It undermines community and social connection, reducing relationships to transactions, increasing loneliness, isolation, anxiety and alienation. In 2021, 100,000 people in the US died by drug overdose, a fivefold increase in a decade.

Unsurprisingly for someone of Monbiot’s background, it’s the ecological impact of neoliberalism that gets the strongest condemnation. The book is excoriating on the global exploitation and destruction of nature, the outsourcing of pollution to places where political resistance is weakest and the way the richest countries have poured money into closing their borders to people fleeing climate breakdown.

When neoliberalism fails, it fails big. An example is the 2008 financial crash, fuelled by the commodification of risk, specifically in the US sub-prime mortgage market. But when the system crashes, it turns inexorably to the state for bailouts.

Neoliberalism has been failing for some time: the problem is there is no clear alternative. The authors are right to counterpose cooperation and community to selfishness and atomisation, but that’s a bit abstract. As long as the core feature of the current economic system is the generation of economic inequality, then political democracy and social solidarity will continue to be subverted. Small steps in the right direction, like participatory budgeting and other ideas mentioned in my review of Grace Blakeley’s Vulture Capitalism, are welcome, but they fall well short of constituting a genuine alternative.

Society is ripe for change and this book tries to end on a hopeful note. But I couldn’t help feeling that a lot more work needs to be done on alternatives to neoliberalism if we are really to move in the right direction.

Mike Phipps’ book Don’t Stop Thinking About Tomorrow: The Labour Party after Jeremy Corbyn (OR Books, 2022) can be ordered here.

Monday, August 26, 2024

UK 
Plumbers, fitters and welders to strike next month

Updated / Monday, 26 Aug 2024 
Unite said that talks with the MEBSCA aimed at averting 
industrial action broke down this morning

By Brian O'Donovan
Work & Technology Correspondent


Plumbers, fitters, welders and apprentices on construction projects, who are members of the Unite trade union, are to take strike action next month in a dispute over travel allowances.

The union said action will begin with a full day of work stoppages on Friday 6 September, with pickets placed at sites around the country.

Unite said that talks with the Mechanical Engineering and Building Services Contractors' Association (MEBSCA) aimed at averting industrial action broke down this morning.

Earlier this month, Unite members voted overwhelmingly for industrial action in pursuit of restoration of the first hour of 'travel time'.

The decision to ballot for industrial action came after initial talks with MEBSCA broke down at the beginning of July.

Unite said that the payment of the first hour of ‘travel time’ was originally cut as a ‘temporary measure’ following the 2008 financial crash and that it was meant to be reviewed after a year.

"If MEBSCA wants to avoid significant disruption to construction sites around Ireland, they must return to the table and engage meaningfully with Unite regarding restoration of the first hour of 'travel time'," said Unite regional officer James McCabe.

"Otherwise, there will be a further escalation in this dispute," Mr McCabe said.

MEBSCA has said that the first hour of 'travel time' has been incorporated into hourly rates since 2011 as part of an agreement reached with Unite.

"An agreement was entered into with Unite in 2011, which incorporated the first hour of travel into hourly rates," a MEBSCA spokesperson said.

"This agreement had the effect of increasing the hourly rate which also resulted in a higher rate being paid for overtime and holidays."

"Unite is now seeking to maintain the higher rate of pay while also seeking to reverse the agreement that was freely entered into by Unite at that time," MEBSCA said.

Sunday, August 25, 2024

Are We Headed for Another Great Depression?


  • The current economic landscape shares striking similarities with the late 1920s,

  • marked by high debt, wealth inequality, and low energy consumption growth.

  • Historical data suggests a strong correlation between energy supply growth, economic growth, and income equality.

  • The world economy may be transitioning from growth to shrinkage due to declining energy resources, potentially leading to financial instability and political conflict.


Today, there is great wage and wealth disparity, just as there was in the late 1920s. Recent energy consumption growth has been low, just as it was in the 1920s. A significant difference today is that the debt level of the US government is already at an extraordinarily high level. Adding more debt now is fraught with peril.

Figure 1. US Gross Federal Debt as a percentage of GDP, based on data of the Federal Reserve of St. Louis. Unsafe level above 90% of GDP is based on an analysis by Reinhart and Rogoff.

Where could the economy go from here? In this post, I look at some historical relationships to understand better where the economy has been and where it could be headed. While debt levels and interest rates are important to the economy, a growing supply of suitable inexpensive energy products is just as important.

At the end, I speculate a little regarding where the US, Canada, and Europe could be headed. Division of current economies into parts could be ahead. While the problems of the late 1920s eventually led to World War II, it may be possible for the parts that are better supplied with energy resources to avoid getting into another major war, at least for a while.

[1] Government regulators have been using interest rates and debt availability for a very long time to try to regulate how the economy operates.

I have chosen to analyze US data because the US is the world’s largest economy. The US is also the holder of the world’s “reserve currency,” allowing demand for the US dollar (really US debt) to stay high because of its demand for use in international trade.

Figure 2. Secondary market interest rates on 3-month US Treasury Bills and 10-year US Treasury Securities, based on data accessed through the Federal Reserve of St. Louis. Amounts for 1940 through 2023 are annual averages. Amount for 2024 YTD is average of January to July 2024 amounts.

Comparing Figure 1 and Figure 2, it is clear that there is a close relationship between the charts. In particular, the highest interest rate in 1981 on Figure 2 corresponds to the lowest ratio of US government debt to GDP on Figure 1.

Up until 1981, the changes in interest rates were either imposed by market forces (“You can’t borrow that much without paying a higher rate”) or else as part of an attempt by the US Federal Reserve to slow an economy that was growing too fast for the available labor supply. After 1981, the same market dynamics no doubt took place, but the overall attempt at intervention by the US Federal Reserve seems to have been in the direction of speeding up an economy that wasn’t growing as fast as desired.

In Figure 2, the 3-month interest rates correspond fairly closely to government target interest rates. The 10-year interest rates tend to move on their own, perhaps somewhat influenced by Quantitative Easing (QE), in which the US government buys back some of its own debt to try to hold down longer-term interest rates. These longer-term interest rates influence US long-term mortgage interest rates.

Recent monthly data show that 10-year interest rates started rising very quickly after reaching a minimum following the Covid response in early 2020. The lowest 10-year average rates took place in July 2020, and rates started moving up in August 2020.

Figure 3. Monthly average secondary market interest rates on 3-month US Treasury Bills and 10-year US Treasury Securities, based on data accessed through the Federal Reserve of St. Louis.

This suggests to me that market forces play a significant role in 10-year interest rates. As soon as people started borrowing money to remodel or to move to a new suburban location, 10-year interest rates, and likely the related mortgage rates, started to drift upward again. If this observation is correct, the Federal Reserve has some control over interest rates, but it cannot adjust the 10-year interest rates underlying mortgages and other long-term debt by as much as it might like.

Related: UK Electricity Bills to Jump 10%

The apparent inability of the Federal Reserve to adjust longer-term interest rates to as low a level as it would like is concerning because the US government debt level is very high now (Figure 1). Being forced to pay 4% (or more) on long-term debt that rolls over could create a huge cash flow issue for the US government. More debt could be required simply to pay interest on existing debt!

[2] An analysis of actual growth in US GDP over time shows how successful the changing strategies in Figures 1 and 2 have been.

Figure 4. Three-year average US inflation-adjusted GDP growth rates based on data of the US Bureau of Economic Analysis.

In the 1930s, the US and much of the rest of the world were in the Great Depression. Interest rates were close to 0% (not shown on Figure 2, but available from the same data). Various versions of the New Deal under President Roosevelt were started in 1933 to 1945. Social Security was added in 1935. Figure 4 shows that these programs temporarily increased GDP, but they did not entirely solve the problem that had been caused by defaulting debt and failing banks.

Entering World War II was a huge success for increasing US GDP (Figure 4). Many more women were added to the workforce, making munitions and taking over jobs that men had held before they were drafted into the army.

After the war was over, the total number of jobs available dropped greatly. Somehow, private sector growth needed to be ramped, using debt of some kind, to provide jobs for the returning soldiers and others left without work. An abundant supply of fossil fuels was available, if debt-based demand could be put into place to pull the economy along. Programs were put into place to get factories running again making goods for the civilian economy. Additional jobs and energy demand were created by upgrading the electrical grid, increasing pipeline infrastructure, and (in 1956) starting work on an interstate highway system.

During the period between 1950 to 2023, the average growth rate of the US economy gradually stepped downward, despite all of the debt-based stimulus that was being added after 1981, as shown in Figure 5.

Figure 5. Average annual US GDP growth rates based on data of the US Bureau of Economic Activity.

[3] While growing debt is important for pulling an economy forward, a growing supply of energy is essential to actually produce physical goods and services.

Economic growth involves producing physical goods and services. The laws of physics tell us that energy supplies of the right types, in the right quantities, are necessary to make the goods and services that the physical economy depends upon.

The rate of growth of world energy supply has been stepping down over the years, as the easiest (and cheapest) to extract fossil fuels tend to get extracted first. The average rate of increase of all energy supply (not just fossil fuels) is shown in Figure 6:

Figure 6. Annual rate of increase in energy consumption growth for the earliest grouping is based on data provided by Vaclav Smil in the Appendix to Energy Transitions. Average rates of increase for later periods are calculated from data of the 2024 Statistical Review of World Energy, by the Energy Institute.

Comparing Figures 5 and 6, we can see that average annual US GDP growth approximately matched growth in world energy supplies in the first two periods: 1950-1970 and 1971-1980.

In the period 1981-2007, average US GDP growth (of 3.2%) soared above world energy consumption growth (of 2.1%). I would attribute this primarily to outsourcing a significant share of the US’s industrial production as the economy shifted to becoming more of a service economy. There were multiple advantages to moving to a service economy. US oil supply had become restricted, and a service economy would use less oil. Also, the costs of imported goods would be much lower than those made in the US for several reasons, including more efficient newly built factories, lower-wage workers, and the use of inexpensive coal as a fuel instead of oil.

The encouragement of increased use of “leverage” under Ronald Reagan in the US and Margaret Thatcher in the UK no doubt added to the effect of using more debt shown in Figure 1. The US government started borrowing more money, rather than increasing taxes. Businesses became larger and more complex. International trade started playing a larger role.

Related: Oil Prices Remain Vulnerable to Demand Fluctuations

Recent low growth in energy supplies has created an economic problem that added debt has only partially been able to hide. (In the latest period (2008-2023), both US average GDP growth (at 1.8%) and world energy consumption growth (at 1.5%) were very low.) Figure 1 shows that the US added huge amounts of debt, both after the 2008 financial crisis, and at the time of the Covid response in 2020. If it weren’t for these huge debt infusions, US GDP growth would no doubt have been much lower. GDP counts the quantity of goods and services produced, not whether added debt has been used to manufacture these goods, or whether customers have used debt to purchase these goods.

[4] In some ways, the world economy today is like the economy of the 1920s.

The 1920s were characterized by both the rising use of debt (especially consumer credit), and wide wage and wealth disparities. This was a time of innovation. Some farmers had modern new equipment that greatly enhanced efficiency, while most farmers could not afford this equipment.

Figure 7 shows a pattern of wage disparity that operates in precisely the opposite direction from the interest rate pattern shown in Figure 2. The lower the interest rates, the more the concentration of wealth among a very small portion of the population. The higher the interest rates, the more evenly wage and wealth is divided.

Figure 7. U. S. Income Shares of Top 1% and Top 0.1%, Wikipedia exhibit by Piketty and Saez.

A comparison of Figure 7 with Figure 6 and Figure 5 shows that (at least for the years since 1950), faster energy consumption growth seems to lead to faster economic growth. With faster economic growth, the economy can support higher interest rates and higher wages for lower-paid workers. There is less push for “complexity” to try to replace workers with machines.

When energy consumption growth is low, the economy tends to grow more slowly. The interest rates that corporations and individuals can afford to pay are relatively low. With low interest rates, asset prices of all kinds soar because monthly payments to buy these assets fall. The prices of stocks, bonds, homes, and farms tend to soar. The already rich become richer and richer, as the poor are increasingly squeezed out of the economy.

Physicist Francois Roddier has said that physics dictates the outcome of widely diverging incomes when energy supply is low. It takes much less energy to supply an economy of a few rich people and many poor people than it takes to support an economy with relatively equal incomes. The vast majority of the supposed wealth of the rich exists as promises that can only be fulfilled in the future if there is enough energy of the right kinds to fulfill these promises. Their promised future wealth does not affect today’s energy use. While the energy use of rich people is somewhat higher than that of poor people, much of the difference disappears when a person considers the fact that much of their wealth is essentially “paper wealth” that may or may not actually be present as the future actually unfolds.

Both the 1920s and the latest period (2008-2023) are very low energy-growth periods. The fact that (2008-2023) is a low energy growth period (at 1.5% per year) can be seen on Figure 6. Energy supply was growing even slightly more slowly in the 1920s (based on data from Vaclav Smil’s Energy Transitions). Population was growing by 1.1% per year in both the 1920s and in the latest period (2008-2023.) Net energy consumption per capita growth was slightly negative (-0.1%) in the 1920s and only a very small positive percentage (0.4%) in the 2008-2023 period. Per capita consumption had been growing much more quickly between 1950 and 1980.

[5] The economy becomes very fragile when the growth of energy supply is low, compared to the growth of the world’s population.

Hidden beneath the surface is the problem that there is not enough energy to go around. This problem doesn’t manifest itself in high prices; it manifests itself in unusually large wage disparities. Very rich individuals (such as Bill Gates and Elon Musk) gain excessive influence. Special interests and their drive for profits also become important. At times, this drive for profits can come ahead of the well-being of citizens.

Citizens become more quarrelsome. Differences between and within political parties become greater. Political candidates no longer treat other candidates with the respect we would have expected in the past. The problem is, in some sense, the problem of a game of musical chairs.

Figure 8. Chairs arranged for Musical Chairs Source: Fund Raising Auctioneer

Initially, the game has as many players as chairs. The players walk around the outside of the group of chairs as the music plays. In each round, one chair is removed and the players must scramble for the remaining chairs. The person who does not get a chair is eliminated from the game.

[6] It seems to me that major parts of the world economy are transitioning from a growth mode to a mode of shrinkage.

Figure 9 gives a representation of how the world’s growing economy can be visualized, and how it may change in the future.

Figure 9. Representation of an economy that is growing up until not long after 2020, and shrinking thereafter, by Gail Tverberg.

The fact that growth in the consumption of fossil fuel energy supplies has been retreating to lower levels should be of concern (Figure 6). At some point, the world economy will be in a situation in which the amount of fossil fuels we can extract is falling. While we have some add-ons to the fossil fuel system (including hydroelectric, nuclear, wind, and solar), they are all manufactured using the fossil fuel system and repaired using the fossil fuel system. These add-ons would stop producing not long after the fossil fuel system stops producing. They need fossil fuels to make replacement parts, among other problems.

The amount of growth in energy supply determines the growth in physical goods and services that can be produced. In periods of rapid growth, borrowing from the future, even at a high interest rate, makes sense. In periods of low growth, only loans with a very low interest rate are feasible. When the economy is shrinking, very few investments can repay loans requiring interest.

Needless to say, repaying debt with interest becomes much more difficult in a shrinking economy. In the US, our underlying problem is that since 1981, the US’s financial policy has been “throw every tool in the tool box” at stimulating the economy. We are now running out of tools to stimulate the economy to grow faster. Adding more debt isn’t likely to work very well, or for very long.

At this point, the many government-funded investments aimed at providing green energy and offering transportation by electricity are not paying back well. Citizens are repeatedly being told that there is a need to move away from fossil fuels to prevent climate change. But world CO2 emissions continue to rise. They simply moved to a different part of the world.

Figure 10. Carbon dioxide emissions for Advanced Economies (members of the Organization for Economic Co-Operation and Development) versus all others, based on data of the 2024 Statistical Review of World Energy published by the Energy Institute.

[7] What does history since 1920 say may be ahead?

It is hard to see that things will turn out well, but we do know that historical civilizations have collapsed over a period of many years. We can hope that if we are facing the collapse of at least part of the world’s economy, this collapse will also be slow. Some intermediate steps along the line likely include the following:

(a) Stock market collapses. After excessive speculation in the stock market in the late 1920s, the stock market collapsed on October 29, 1929, starting the Great Depression. Another major crash occurred in 2008, during the Great Recession. Both of these speculative bubbles seem to have been fueled by low short-term interest rates.

(b) Drops in the prices of homes, farms, and other assets. The Great Depression is noted for major drops in the prices of farms. The Great Recession is known for major drops in the prices of homes. We are now facing a situation with far too much Commercial Real Estate. Its price logically should fall. Farmers are also having difficulty because wholesale food prices are too low relative to the various costs involved, including interest payments relating to equipment purchases and mortgages. The problem is especially acute if farm property has been purchased at currently inflated prices. The prices of farms logically should fall, also.

(c) Debt defaults, related to asset price drops. Banks, insurance companies, pension plans and many individuals owning bonds will be badly affected if defaults on loans or bonds start increasing. (In fact, even if the market interest rates simply rise, the carrying value on financial statements is likely to fall.) If commercial real estate or a farm is sold and the sales price is less than the outstanding debt, the bank issuing the loan will be left with a loss. This debt is often resold, with credit rating agencies falling short in indicating how risky the debt really is.

(d) Failing banks, failing insurance companies, and failing pension plans. Even bankrupt governments defaulting on their loans.

With failing banks, there is less money in circulation. The tendency is for commodity prices to fall very low, putting farmers in worse financial shape than before. They cut back on production. Food production and transport use considerable amounts of oil. Reduced food production leads to less need for oil consumption and thus, falling oil prices. With low oil prices, production tends to fall.

(e) If a government survives, it may try to issue much more debt-based money to try to raise prices. This might work if the country is able to produce all goods locally. But the huge amount of new money (and debt) will not be honored by other countries. The result is likely to be hyperinflation, and still no goods to buy.

(f) Persecution of the wealthier people blamed for society’s problems. If people are poor, and there aren’t enough goods to go around, there is a tendency to find someone to blame for the problem. In Europe, prior to World War II, the Nazis persecuted the Jews. The Jews were often rich and worked in finance or the jewelry business.

(g) War. War gives the possibility of obtaining resources elsewhere. Figure 4 shows that going to war can greatly ramp up GDP. It is a way of putting laid-off workers back to work. It is an age-old solution to not-enough-resources-to-go-around.

[8] Can any political approach put off the bad impacts suggested in Section [7] above?

A country that can provide complete supply chains based on its own resources, completely within its own borders can be somewhat insulated from these problems, as long as its resources are adequate for its population. I don’t think that any of the Advanced Countries (members of the OECD, which is similar to the US and its allies) can do that today. The US is closer to this ideal than Europe, but it is still a long way away. The central and southern part of the US, which is where Donald Trump’s support is strong, is closer to this ideal than elsewhere.

Trump is advocating adding tariffs on imported goods. Such tariffs would work in the direction of independence from China, India, and other industrialized nations. Trump also seems to advocate staying out of wars, wherever possible. If an area is doing well in terms of energy supply (including food supply), this would be a good strategy.

Kamala Harris is advocating capping today’s food prices. This would please city-dwellers, but it would encourage farmers to quit farming. Capping today’s food prices would also discourage the importation of food from elsewhere, leaving many empty shelves in grocery stores. Indirectly, it would also have an adverse impact on the world’s oil production and the quantity of food grown elsewhere.

Giving more money to poor people would almost certainly lead to more government debt. If countries in Europe were to do this, it would almost certainly devalue their currencies. They would find it harder to import goods from anywhere else in the world.

In fact, the US would likely also encounter difficulty in importing as many goods from elsewhere, if it chooses to give more money to poor people (and fund this generosity through more debt). China and Russia would have even more motivation to abandon the US dollar for trading purposes than they do today. The US, Europe, and other Advanced Economies would increasingly find imported goods unavailable.

Wind, solar, and electric vehicles are not fixing the economy now. Adding more debt to subsidize these efforts would likely have the same bad effects as adding more debt to subsidize poor people.

[9] A guess as to what could be ahead for the US, Canada, and Europe.

Donald Trump is suggesting tariffs and other policies that might be helpful for the parts of the US, Canada, and Mexico that think they might have enough resources to more or less get along on their own in the near future. This includes much of the central and southern part of the US. Central Canada would fit into this pattern, as well. Mexico is connected by pipeline to this area, too. At least in the US, Trump is favored in these areas.

In the highly populated areas along both US coasts, the debt-based policies of Kamala Harris will seem more reasonable because these sections have limited resources to rely on, but lots of population. The only solution they can imagine is more debt. I expect that Europe and the coasts of Canada will follow Kamala Harris’s strategies, but with their own leaders.

I can imagine a scenario in which after the US election, the US will break apart into two sections: a Trump section in the center of the US, and a Harris portion consisting mostly of the two coasts, and perhaps a few northern states. The Trump section will band together with Central Canada and Mexico and try to keep operating for some years longer. The Harris portion will join together with the coasts of Canada and most of Europe to get into war with Russia and China. The Harris portion will issue lots more debt. The Harris group will forget that their areas cannot really make many armaments without a huge amount of international trade. As a result, the Harris group will have great difficulty in being successful at war.

By Gail Tverberg via Our Finite World