Inflation and unemployment are among the top issues for U.S. voters and could play a pivotal role in determining the election. That’s according to Raymond Sfeir, director of the A. Gary Anderson Center for Economic Research at Chapman University.
Speaking to NTD, Sfeir explained how recent economic trends are influencing voter sentiment.
“In my view, the most important part that really impacts the election, as far as the economy is concerned, is the unemployment rate and the inflation rate,” he said. “These are the two main factors that impact their vote.”
The current unemployment rate stands at 4.2 percent, which Sfeir described as relatively low. “It’s definitely not on the high side,” he said. “That makes employment a favorable factor as far as the incumbent party is concerned.”
Regarding inflation, with the Consumer Price Index (CPI) now at 2.9 percent and expected to continue declining, Sfeir said both factors currently favor the Biden administration.
Weighing the two factors, Sfeir believes voters are more focused on inflation than unemployment. “I believe that most people are really concerned about inflation more than anything else, particularly the high level where it is right now,” he said.
While unemployment remains an important issue, Sfeir explained that “it really comes after inflation.”
“Everybody loses when prices are very high,” he said. Sfeir said the most severely affected are the middle class, the lower middle class, and families with limited means, because they spend a larger percentage of their income on food and rent.
“So when rents go up and when food prices increase, especially as happened in our case, they really hurt badly.”
“Prices are high, and people are not happy with that,” he said. “People feel that they can buy a lot less compared to what they used to, due to higher prices.”
In addition to these concerns, the proposal for a U.S. sovereign wealth fund, which has garnered bipartisan interest, is adding another dimension to the economic debate. Sfeir said that such a fund would only increase the current budget deficit.
He compared the U.S. situation to countries like Saudi Arabia, Kuwait, and Norway, which have established sovereign wealth funds. “They can save a lot of money and put it into that fund to invest,” he said.
For the United States, however, Sfeir pointed out that “the last time we had a budget surplus was during the Clinton administration in its last two years, and the first year of the George W. Bush administration. Since then, we’ve had deficits all the time.”
“It looks a little bit ridiculous to really have a sovereign fund when we really need to borrow money in order to put it in that fund, because we are borrowing money to finance our expenditures,” he said.