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Joe Biden first entered public office in 1970, the same year Jimmy Carter was elected governor of Georgia. Just two years later, Biden became the Senator from Delaware, and throughout Carter’s 1976 presidential campaign, few worked harder on his behalf than Biden himself. Even after four years marked by failed policies, Biden went on national television during the 1980 presidential election to publicly praise Carter. Yet, despite Biden’s loyalty, Carter’s presidency ended in a resounding defeat, with Ronald Reagan winning in a landslide that carried 41 of the 50 states.
This history is important because, of all people, Joe Biden should be well aware that Jimmy Carter’s style of governance—and particularly his economic policies—were deeply unpopular and ultimately unsuccessful. Yet today, it appears Biden is attempting to revive some of the very same policies that triggered economic challenges during Carter’s administration.
Central to Carter’s approach was Keynesian economics, a theory based on the idea that economic growth is driven primarily by consumer spending. According to this philosophy, if people run out of money, the government’s role is to simply print more and inject it into the economy to encourage spending. Carter’s belief was that the poorer classes would spend indiscriminately, and that by putting more money in their hands, the overall economy would benefit. However, this approach overlooked the importance of saving and investing for the future, and ultimately contributed to economic instability.
Historically, we know when more money is printed or injected into the economy, prices rise on goods and services. This is exactly what happened under the Carter administration when inflation rose to 11.3% and averaged 7.1% throughout his presidency. Not only did prices rise, but unemployment rose to 6%, creating a new and confusing situation which had never been observed before. It was called stagflation. This is when inflation and unemployment occur at high levels at the same time. Naturally, Carter and Biden belittled and attacked Reagan’s supply-side, tax cutting economic plan throughout the 1980 presidential election. But the American people were sick and tired of Carter’s failed economic policies and the rest is history. Reagan won the election and restored the American economy. Reagan restored the economy so well that in 1984 he carried 49 of the 50 states, and all but 13 of the 538 electoral college votes were cast in his favor.
Knowing all this, Biden would be wise not to repeat the same mistakes his friend Jimmy Carter made while sitting in the Oval Office. Yet, Biden is not only repeating Carter’s mistakes he is replicating them on steroids. He is determined to raise taxes and is currently giving money away to people who haven’t created any value in exchange for that money. Biden is literally “Going Back to the Future” to the Carter years. And this seems to be his presidential theme. Even Lawrence Summers, a revered economic advisor for Clinton and Obama, has warned:
In March of this year, 2021, inflation has risen to 4.2%, 1.76% higher than 1977’s core inflation rate of 3.44%. But according to Biden and his cheerleaders in the mainstream media, this is okay because inflation will reduce bonds and cash values, which they believe will hurt “the rich people”. But what we learned from Carter’s economic policies proves this assumption wrong. It will be the middle and poorer classes who are hurt when bonds and cash are weakened not the rich. The rich protect themselves by owning assets which retain their value such as whole life insurance and real property. Therefore, when inflation and unemployment rise, the rich keep getting richer and the poor and middle class find themselves getting poorer. This is what Biden’s economic plan will accomplish for America. This is why Biden is so stuck on raising taxes and passing large spending programs. While we don’t have the money to afford these programs, the Federal Reserve is willing to print more money anytime the government asks.
Yet there is good news. Carter was a one term president because his policies created dire consequences for the American people. Though people tend not to recall history, especially that which occurred prior to their own life span, they do understand the cost of higher prices and jobs scarcity. Without a doubt, Biden is steering our economy down the same path Carter attempted, though at a much faster pace. This means it won’t be long before people begin complaining about rising gas and food prices, supply shortages and job scarcity. Already gas prices have increased by nearly $1 a gallon since December of 2020 and food prices have risen to a six-year high. With thousands of new immigrants entering into the United States, unemployment rates will continue to remain high as current unemployment hovers at 3 percentage points higher than pre-pandemic levels of 2.9%. Furthermore, since the new immigrants are eligible to receive free money from the government prompting even higher inflation.
Paul Volcker, appointed Federal Reserve Chair by President Jimmy Carter, took decisive action to combat the rampant inflation of the late 1970s by raising interest rates—eventually pushing them as high as 21%. While this strategy successfully crushed inflation, it also severely crippled the economy. It was Ronald Reagan’s subsequent tax cuts and economic policies that helped restore growth and stability.
Amidst this challenging environment, there was one financial tool that stood out: whole life insurance. Even when prime interest rates soared to 21%, policyholders with whole life insurance could still borrow money from their policy’s cash value at rates below 10%. This highlights a unique advantage of whole life insurance as a long-term asset—not only is its value independent of the immediate market or economic conditions, but it also offers liquidity once equity has been built up in the policy.
Whole life insurance is one of only a few places where money can be safely stored and guaranteed without risk. It’s an ideal strategy for preserving wealth and accessing cash when economic hardships strike—especially if we face a return to the economic adversities of the 1970s and early 1980s. Those with access to liquid funds will be best positioned to seize opportunities when tough times come around again.
Don’t wait until it’s too late. Begin building your cash value today by purchasing a whole life insurance policy while you still can.
Tomas P. McFie DC PhD
Tom McFie is the founder of McFie Insurance and co-host of the WealthTalks podcast which helps people keep more of the money they make, so they can have financial peace of mind. He has reviewed 1000s of whole life insurance policies and has practiced the Infinite Banking Concept for nearly 20 years, making him one of the foremost experts on achieving financial peace of mind. His latest book, A Biblical Guide to Personal Finance, can be purchased here.
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