The state of the economy is almost always the most important factor in presidential elections, and 2024 started out no differently. The basic question all year has been whether inflation would recede quickly enough to improve voter spirits and give incumbent President Joe Biden a second term.

After the June 27 presidential debt, the economy has dropped to second place among the most important electoral issues. The first is now Biden’s age and increasingly apparent fragility. In the debate against former President Donald Trump, Biden gave one of the worst performances of his long political career and validated widespread concern that he lacks the mental vigor needed to serve another term in the White House.

Biden mumbled and stumbled, tripped over factoids, and lost his train of thought several times. While answering a question about the $33 trillion national debt, Biden meandered into health care, said something unintelligible about COVID then ended with this head-scratcher: “Look, we finally beat Medicare.” His raspy voice—due to a cold, his people said—gave Biden a spectral air, like he was the Ghost of Presidents Past.

The debate featured plenty of economic discussion, but it was unilluminating, bordering on ridiculous. The two candidates spent several minutes arguing about what happened in 2020 and 2021, when the COVID pandemic triggered a short but deep recession, followed by gushers of fiscal and monetary stimulus.

Biden said that when he took office in 2021, Trump had left behind an economy “in free fall.” Trump countered that he gifted Biden “something great” by establishing the conditions for the recovery that took hold in 2021.

Trump is the lyingest man in America, but it’s somewhat true that Biden inherited an economy poised to boom. Trump signed into law three bipartisan stimulus bills totaling around $4 trillion, and his administration started developing the COVID vaccines that rolled out during Biden’s first year. At the same time, the Federal Reserve—which the president doesn’t control—enacted massive amounts of fiscal stimulus that rapidly righted the financial sector.

Biden also blamed Trump for laying the groundwork for inflation, while Trump said it was entirely Biden’s fault. This is a split decision. Trump and Biden both signed giant stimulus bills into law, flooding the economy with money that eventually pushed prices up. COVID-related supply-chain disruptions and huge shifts in consumer demand also contributed.

Thing is, none of this barely matters in 2024, when voters are broadly worried about affordability issues and wondering if inflation is abating for good. They want to know whether Trump or Biden will do better on next year’s economy, not the one from four years ago. Amid Trump’s lies, Biden’s half-truths and the re-litigation of the COVID recession, they got almost no clues on that on June 27.

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The sad irony for Biden is the economy continues to go his way. Trump said at the debate, “Inflation’s killing our country.” But inflation is getting back to normal and might even be there by Election Day, November 5.

The morning after the debate, new data showed a key inflation metric rising by the smallest amount since March 2021—when inflation was a mere 2.6%. Wages are rising by more than prices, allowing workers to regain purchasing power lost to inflation.

“The core of the economy is healthy and we anticipate growth will remain close to 2% over the rest of this year,” Oxford Economics reported on June 28. “The labor market is resilient, and with inflation pressures easing again, we expect real incomes and consumer spending growth to remain solid."

A growing economy and low unemployment rate midway through an election year normally make reelection a shoo-in for an incumbent president. Biden is likely to finish out his first term with no recession, the worst of inflation far behind, and the strongest job growth under any president in history.

But polls and prediction markets now foretell a Biden defeat, for reasons having little to do with the economy. It's the senility, stupid.

There’s still a lot that could change the outlook. A judge will sentence Trump for 34 felony convictions on July 11. Trump may have to accept the Republican nomination in mid July by conference call if the judge sentences him to home detention. There’s a non-trivial chance Trump could even get a jail sentence.

Biden, if he stays in the race, will get another crack at Trump during the second debate, scheduled for September 10. More people will watch, giving Biden a chance show anew that he’s youthful and vigorous. He may have an even better story to tell on the economy then than he does now. But he needs to find the words to do it.

Rick Newman is a senior columnist for Yahoo Finance. Follow him on Twitter at @rickjnewman.

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