Image courtesy of Reuters
image captionVice President Harris made her first economic pledges in a presidential campaign speech in Raleigh, North Carolina on the 16th
6 hours ago
By Natalie Sherman, BBC News
In the run-up to the US presidential election in November, Democratic Vice President Kamala Harris gave her first speech on the topic of economic policy on the 16th, pledged to promote the construction of millions of new homes, support home ownership, curb food price gouging, cancel medical debt, and provide child tax credits.
Speaking in the battleground state of North Carolina, Vice President Harris laid out her economic pledges, based on the Biden administration’s economic policies but also responding to voters’ dissatisfaction with rising prices from 2021 onwards.
Harris’ economic pledges include providing down payment assistance to first-time homebuyers and a “first-of-its-kind” tax credit for builders of homes for first-time homebuyers, with her campaign estimating that an estimated 4 million households could qualify for up to $25,000 in down payment assistance over four years.
Harris also promised to cap the monthly price of insulin, a diabetes medication, at $35 (approximately 5,200 yen), erase medical debt, and provide a $6,000 (approximately 890,000 yen) tax credit for families with new babies.
Additionally, he supported federal legislation to ban food companies from unfairly gouging prices and urged the passage of federal legislation to ban unfair algorithmic rent “fixing.”
Many of the vice president’s proposed economic measures would require Congress to pass them, meaning Harris’ proposals could get bogged down in Congress.
Republican candidate and former President Donald Trump criticized Harris for having had time to fulfill her campaign pledges during her three years as vice president of the Biden administration, saying, “Where have you been? Why haven’t you done it?” The Trump campaign has also criticized Harris’ pledges as “dangerously liberal.”
In response, Harris said in her speech on the 16th, “If you want to know who a person cares about, look at who they fight for. Donald Trump fights for billionaires and big corporations. I will fight to put money in the hands of working and middle-class Americans again.”
Image courtesy of Reuters
image captionVice President Harris visits a grocery store with North Carolina Governor Cooper in Raleigh, North Carolina on the 16th
Economic measures to support consumers
Democratic Party officials and supporters are hoping that Vice President Harris will be a more persuasive and trustworthy voice to speak to an economically struggling American than President Joe Biden.
Robert Weissman, vice president of the consumer group Public Citizen, said Harris’ economic plan is “about helping consumers and fighting bad companies. The (Biden) administration has said that, but Harris has proposed much stronger measures.”
Micah Roberts of polling firm Public Opinion Strategies said American voters have a long history of trusting former President Trump and Republicans on economic issues, and that inflation will likely remain a sticking point for Democrats.
Public Opinion Strategies recently conducted a bipartisan poll on the economy for CNBC, with Roberts representing the Republican side of the poll, which found that Trump still has a wide lead over Harris on the economy.
“Trump has had a long lead on these issues for well over a year now,” Roberts said, adding that he found it “hard for me to believe” that the gap would suddenly close unless something major had changed.
Pros and cons of banning price hikes and tax deductions
Harris’s policy of banning price gouging on food products is expected to be popular with voters, although experts say it has been criticized by economists.
Many states in the United States already have laws banning price gouging, which will be put into place during emergencies such as hurricanes.
But some economists say it is difficult to define what constitutes unfair price gouging, and broadening the scope of restrictions could have the opposite effect of discouraging companies from increasing production when goods are in short supply.
According to Michael Salinger, a professor of market economics, public policy, and law at Boston University’s Questrom School of Business, a similar price-gouging ban was considered when he was chief economist at the Federal Trade Commission under President George W. Bush. However, he said, “I thought it was a bad idea then, and I still think so.” He added, “When you regulate a competitive market, you end up with shortages. Experience tells me that it always does.”
He also said Harris’ other economic stimulus proposals would be controversial because they would be hugely expensive to implement.
For example, the $3,600 per child tax credit was temporarily enacted by Congress during the pandemic but was not extended.According to some estimatesThe implementation cost to the government would exceed $1 trillion.
Both the Democrats and Republicans are pursuing populism, which aims to put forward policies that are popular with many voters. As a result, Republican vice presidential candidate Senator J.D. Vance supports a tax cut that is even larger than the Harris proposal, despite criticism that the tax cut would require huge financial resources.
Salinger said Trump’s other economic measures would also not combat inflation.
Many economists expect former President Trump’s proposed expansion of oil drilling will have only a limited effect on global energy markets, and they warn that his proposal to impose tariffs of 10% or more on imports would probably lead to higher prices.
For now, inflation in the US is stabilizing as supply chain disruptions during the pandemic and the shockwaves from the war in Ukraine subside.
Bureau of Labor Statistics, U.S. Department of LaborOn the 14th, the Bank of Japan announced that the inflation rate in July was 2.9% compared to the same month last year. The July increase was the lowest since March 2021. The inflation rate is an indicator that tracks the rate of increase in the price level.
“Even though inflation has fallen, prices are still high. That’s what many are criticising, and they’re right, but high prices are the natural operation of market forces. Trying to stop market forces from operating is like trying to stem the tide. It just won’t work,” he said.
