How Bad Are The Economic Policies Of The Candidates? Let Me Count The Ways
Whose economic plans are capitalistic and market oriented…those of Harris or Trump? It really isn’t even a close call.
If you believe in capitalism and markets determining a nation’s economic outcome, then the policies that Trump’s states he would enact are a hodge podge of populist nonsense. His main tax and regulatory precept of tariffs tells you much about the Trump way of managing an economy. Tariffs, plain and simple, are a regressive form of taxation that has not resulted in a better economy for the nations that have enacted them.
The last go round of Trump tariffs seriously hurt agriculture and resulted in large subsidies to large agricultural conglomerates but not to small farmers. Steadfast allies like Canada looked on in disbelief as that nation’s products were declared a national security risk by Trump’s administration. Recently Prime Minister Trudeau stated, “The reality is Americans are facing challenges from the rising cost of housing, and so paying more for lumber from Canada makes no sense,” The tariffs were placed on Canadian soft wood products by Trump and have been left there under Biden which was a big mistake.
Because of that one idiotic tariff, Americans pay an additional 14.5% tax on most plywood and soft lumber that they buy. You can’t make a big deal out of inflation when government policy is a contributing factor and the cause of inflation in that instance can easily be done away with. Trump’s insistence that the exporting company or industry ultimately pays the tariff and not the consumer is something that only an economic illiterate would say.
Every component cost and the labor needed to manufacture a product is used to determine the sales price of the item. If one of the component costs has a 200% tariff on it, then the American consumer pays it. One can argue that if you make costs high enough, then the product will be made in America. That is Trump’s goal, though it is a very indirect way of going about it.
Yes, some enterprising businessperson will open a factory to make the product. When Americans buy the product, they were formerly purchasing from another country, they still will be paying much more than they were before the tariff was imposed. But now the consumer would be subsidizing a U.S. company because of tariffs. Except when a product has a national security component how are we hurt by a consumer buying a product as cheap as possible even if it is produced overseas?
The Trump plan of tariffs is a giant tax increase on the American people and will contribute 3.5% to the inflation rate according to economists Kimberly Clausing and Mary E. Loving of the Peterson Institute. If you add in the worker shortage that is likely to develop because of Trump’s immigration policies, inflation will soar.
Biden has continued many of Trump’s tariffs. He has done so because of his pro-labor stance. Harris looks like she too is more concerned with labor support than having more people economically viable. It is great that we have $200,000 dock workers but that does have an impact on the overall economy.
If you remember why-off shoring of manufacturing occurred, it was that labor became too expensive to justify the goods being produced here. There were economic repercussions because of it but overall, the 2024 American economy has eclipsed that of 1975. Today’s consumer has the availability and quality of products that was undreamt of 50 years ago.
That doesn’t mean the government needs to be anti or pro union. The goal should be to have individuals represented by a union if they choose. On the other hand, business also needs to bargain in good faith with the workers’ representatives. The government’s responsibility is to be neutral and make sure that there is no unfair advantage by either side.
It was a mistake for President Biden to join a picket line. It showed a prejudice that is not in keeping with the ideas of fairness. The government’s sole role in our economy is to make sure that all participants are treated fairly. That goes for competition between companies and competition for the cost of labor. The minute the government loses that objective role, we no longer have a market economy.
Another Trump mistake is his demonization of immigrants. As far as economics are concerned, a working person, with or without proper status, is a plus for our economy. Whether a worker is native born or came here by illegally crossing the border but is gainfully employed, then the country is benefitting. Most pay payroll and social security which adds to government and retirement coffers.
With our unemployment figure at 4.1%, clearly undocumented workers are needed. The industries that would be devastated without this labor are agriculture, food processing, and the building trades. Trump’s plan to deport millions would result in inflation increasing by 2–3% as labor shortages take hold. Further our economy would contract because of the loss of those consumers.
Without the workers to pick our crops, food would become more expensive and more would be imported. Forget about the havoc caused to the fabric of society, billions of federal dollars would be spent on rounding up productive workers, detaining them, and then flying them to their countries of origin.
Harris’ plan to have Congress pass and implement the border bill that Trump killed would begin to return a semblance of order. Then comprehensive reform of our legal immigration system must be done. With our aging population, there is no way that our economy does not suffer without new workers. That can only be accomplished by immigrants.
Waiting years to be able to come legally here is not justifiable. The United States has always counted on immigration to give us the needed workers and population for our economy to grow. You can’t stop immigration and have enough workers to pay into the tax system. Last year our birth rate declined 3% over 2022 and in 2022 our fertility rate was 1.7 per female.
Harris has announced some naive economic plans, perhaps with good intentions, but it shows that she has always been on the government payroll. One of the reasons we have a crisis is that our college loan programs can directly be laid at the government’s feet. Students go into debt without thinking of the consequences because institutions have increasingly raised tuition since they know the loan program is the students back stop.
What would happen if the government said it would not loan more than $10,000 per year to students. The market would then curtail increases because there would be fewer consumers at those higher prices. It could even precipitate drops in tuition.
Harris’ plan to give first time home buyers a $25,000 credit or subsidy would accomplish exactly what? Markets would tell us that home prices would go up because there were more cash in the system chasing the same number of homes…the same thing that happened with college tuition.
A better plan would be to remove barriers to more building by tying federal aid to zoning and density reforms. There is a shortage of housing in the country that will take years to solve. If the private sector, local, and state governments are not incentivized to build more, no number of individualized credits will make housing more affordable.
Both Harris and Trump have been throwing out tax breaks for tipped workers, on overtime pay, and social security benefits. Income is income, and it should be taxed at the same rate. The two largest income streams that are not taxed appropriately are capital gains and carried-forward interest. Both are income to the person receiving the money and a deduction to those paying it.
Does it really matter how a dollar was earned? If it was new money to the person receiving it, the tax paid should be the same percentage as other income. Both candidates are trying to appeal to voters by gimmicks.
Harris, but especially Trump, are not great economic thinkers. I believe Harris could see better ways of accomplishing her goals. Trump proved during his first term as president and throughout his life of bankruptcy filings that he has no idea on how our economy works or how to run a successful business.
Harris wants to provide a safety net for the American people but will never do so unless she stops looking at it as a “Great Society” liberal Democrat and instead by having a comprehensive plan. One of Vice-President Harris’ ideas is to give every new small business owner a $50,000 tax deduction.
Even though you could hold off using the credit until the business is profitable, it still won’t help the formation of new small businesses much. Most fail within the first couple of years. Many who would start businesses don’t because they are afraid their families would suffer without steady income.
If you really want to encourage the formation of new businesses, make it easier for the new entrepreneur’s family to take advantage of a safety net. Provide universal day care, medical care, and other basic necessities for all. More people would be willing to take a risk and strike out on their own if their kids weren’t being evicted if the business failed.
I don’t believe Trump could care less about the American people. For almost a decade, he has said anything that crossed his mind, and he has called it policy. After all this time, he recently still said that he had a concept for a plan to replace the Affordable Care Act. This is not a serious person in the policy sphere.
