Kamala Harris' Economic Proposals: A Closer Look

As the 2024 presidential race begins to take shape, Vice President Kamala Harris has put forth an economic agenda that she claims will reduce expenses for American families and stimulate economic growth. However, her proposals heavily rely on substantial government intervention, which may end up hurting the very people she intends to assist. Central to Harris’ strategy is a fundamental skepticism of free markets and a conviction that the government can effectively oversee the nation's economic systems.

Food Price Control Proposals

One of the most alarming proposals from Harris is her plan to enforce federal restrictions on price increases for food producers and grocers. Although rising food prices are indeed a hardship for many families, attempting to regulate prices through government intervention could lead to serious problems. Price controls typically result in shortages and illicit markets. The failures of price controls in countries like Venezuela highlight the disastrous consequences of such policies. Rather than allowing market forces to efficiently distribute resources and encourage increased production, Harris’ approach could lead to decreased investment in the food industry and potential shortages of essential goods.

Housing Proposals

Harris' housing proposals also heavily depend on significant government intervention. Her plan includes the construction of 3 million new housing units to alleviate supply shortages and providing $25,000 in down payment assistance for first-time homebuyers. Such direct federal subsidies for construction on this scale could discourage private investment, leading to debilitating public sector inefficiencies. A more effective housing reform should focus on eliminating regulatory barriers to new construction at the local level. Restrictive zoning laws and mandates are the main causes of America’s housing shortage. Encouraging states to streamline these processes could promote private sector housing development without incurring massive federal expenditure. The solution lies in less government intervention, not more.

Tax Proposals

Harris' tax proposals also reflect a misguided belief that prosperity can be achieved through taxing and spending. By proposing to increase taxes on corporations and high-income individuals, she risks cutting the capital investment necessary to drive productivity growth and real wage increases. Additionally, Harris plans to expand various subsidies for housing, childcare, and other expenses. While these policies may seem supportive of families, they fail to address the root causes of affordability issues and risk creating new forms of government dependency. A more effective approach would be to pursue policies that decrease government influence in the economy, which is causing the inflation that is hurting families.

Long-Term Consequences

Supporters of Harris’ plan argue that it will provide much-needed relief to struggling American citizens. However, the long-term consequences could outweigh the potential short-term benefits. An analysis by the Penn Wharton Budget Model suggests that Harris’ economic proposals would increase federal deficits by $1.2 trillion over the next 10 years on a conventional basis, and by $2.0 trillion when considering macroeconomic effects. This significant increase in government debt could crowd out private investment and lead to higher interest rates, potentially triggering a recession. Furthermore, the Penn Wharton analysis predicts that Harris’ plan would actually reduce GDP by 1.3 percent by 2034 and by 4 percent within 30 years, relative to current law. This decrease in economic output would result in lower wages for workers across all income groups. The model estimates that pre-tax wages would fall by nearly one percent over the next decade and by 3.3 percent by 2054.

Bottom Line

These projections expose the main flaw in Harris’ approach: by prioritizing short-term government intervention over policies that encourage long-term economic growth, her plan could end up making everyone worse off in the long run. Harris’ economic vision reflects a belief that enlightened bureaucrats and politicians in Washington can effectively plan and manage a $25 trillion economy. However, the failures of central planning throughout history demonstrate that free markets remain the most powerful engine for prosperity and human flourishing. Instead of expanding government control over large portions of the economy, policymakers should focus on creating the conditions for organic economic growth. This means maintaining sound monetary policy, reducing regulatory burdens, promoting free trade, and fostering innovation and entrepreneurship. Economic freedom, not top-down control, is the most effective way to build a more prosperous future for all. What are your thoughts on this matter? Do you think Harris' proposals could lead to economic prosperity or could they potentially harm the economy? Share this article with your friends and discuss it. Also, don't forget to sign up for the Daily Briefing, which is delivered every day at 6pm.