When it comes to economic policy, the battle lines are drawn between former President Donald Trump and Vice President Kamala Harris. According to the latest survey by The Wall Street Journal, most economists are betting that Trump’s policies would lead to higher inflation, interest rates, and deficits compared to those proposed by Harris.
Now, before you say, “Wait a minute! Wasn’t inflation lower during Trump’s presidency?”—well, it’s complicated. So, let’s break it down with a dash of wit, a sprinkle of sarcasm, and some cold, hard economic reality. Spoiler alert: It’s not as simple as picking the person who tweets less.
TL;DR
- Inflation: Experts believe Trump’s policies, particularly tariffs, could lead to faster price increases compared to Harris’ proposals.
- Interest Rates: Higher federal deficits under Trump may result in increased interest rates, while Harris may keep them more stable.
- Tariffs: Trump’s broad-based tariffs may boost domestic jobs but could raise costs for consumers and hurt industries reliant on imports.
- Deficit: Economists predict Trump’s policies could widen the federal deficit more than Harris’ plans.
- Economic Growth: While Trump focuses on tax cuts and deregulation, Harris aims for broader social benefits like home-buying credits, but opinions are split on which approach grows the economy faster.
- Unemployment: Both candidates are expected to maintain stable unemployment levels, though their methods differ.
- Recession Risks: The risk of a recession is lower than previously thought, regardless of who becomes president.
Inflation and Interest Rates: Trump’s Tariff Tango
If there’s one thing economists agree on, it’s that Trump’s policies could pump inflation faster than you can say “trade war.” In the October survey, a whopping 68% of economists predicted prices would rise faster under Trump than under Harris. And, honestly, who can blame them? Trump has been all about tariffs, and he’s made it clear he’s not backing down anytime soon. His latest proposal? Across-the-board tariffs of 10% to 20% on imported goods, with a special 60% for China, because why not?
Tariffs, in theory, sound like a patriotic move to bring manufacturing back to the good ol’ U.S. of A. But here’s the kicker: those tariffs often trickle down as higher prices for consumers. That’s you, me, and everyone who enjoys buying things. Sure, Trump argues that tariffs will protect American jobs, but the economists who crunch the numbers aren’t so convinced.
Dan Hamilton from California Lutheran University and his colleague Matthew Fienup are on record saying Trump’s tariff love affair will push prices up faster than Harris’s proposals. “It became apparent to us that Trump is even more anti-free trade than Harris,” Hamilton quipped.
So, while Trump claims his tariffs will save the American workforce, the truth is they could cost you more when you’re buying your next car, smartphone, or even groceries. Surprise!
Harris’s Economic Strategy: Baby Bonuses and Homebuyer Credits
On the flip side, Vice President Harris is offering some pretty attractive carrots—think credits for newborns and homebuyers. Sounds like a win for families, right? Economists don’t seem to hate these ideas, but they’re also not jumping for joy. The consensus is that her policies are less likely to stir up the inflation pot as much as Trump’s tariffs and tax cuts.
While Harris’s approach may not set off fireworks in the economy, it could prevent things from blowing up. Think of her as the calm, responsible parent who’s making sure the house doesn’t burn down, while Trump is the fun, slightly chaotic uncle who’s juggling matches and gasoline. Both have their appeal, but one is more likely to burn a hole in your wallet.
Deficit Dilemma: Trump’s Tax Cuts vs. Harris’s Credits
Now, let’s talk deficits because, apparently, the U.S. government likes to spend money like it’s going out of style. The Wall Street Journal survey showed that 65% of economists believe Trump’s policies will put more upward pressure on the federal deficit, up from 51% in July. And let’s be real: it’s hard to cut taxes (which Trump loves to do) while also cutting the deficit. That’s like trying to diet while eating donuts every day—it’s not happening.
Trump’s grand plans include eliminating taxes on Social Security income, overtime pay, and even giving breaks to American expats. Oh, and let’s not forget the increased deportations he’s promising, which could reduce the number of tax-paying workers. It doesn’t take an economist to see that this might lead to a deficit disaster.
In contrast, Harris’s policies, while not exactly penny-pinching, are viewed as less likely to balloon the deficit. Sure, her credits for families will cost money, but at least they’re more targeted, unlike Trump’s broad tax cuts that seem to favor everyone—especially the rich.
Economic Growth: Can Trump’s Tax Cuts Boost the Economy?
If there’s one area where economists are a little more divided, it’s overall economic growth. About 45% think Harris’s policies will lead to faster growth, while 37% are betting on Trump. And you know what? Trump’s got a point here. Cutting corporate taxes and slashing regulations could spur some serious growth. But (and this is a big “but”) his love of tariffs might end up counteracting those gains.
Remember, it’s not just about growing the economy—it’s about sustainable growth. Trump’s tariffs could lead to higher costs for manufacturers, which might put the brakes on growth faster than a last-minute traffic stop. Harris, on the other hand, is playing the long game, betting that targeted credits will build a stronger foundation for growth.
Who’s Really Better for the Economy?
Now, if you’re asking for my personal opinion—well, both candidates come with their own set of problems. Trump’s policies are like a fast-food meal: quick, cheap, and satisfying at first, but potentially disastrous for your health (or in this case, the economy) in the long run. Harris’s policies, meanwhile, are more like a balanced diet: slower to show results but ultimately healthier for the country’s financial future.
Would Trump’s tax cuts give the economy a short-term boost? Probably. But at what cost? Higher inflation, deficits, and potentially crippling interest rates down the line. Harris’s policies might not generate as much buzz, but they’re more likely to keep the economy on a stable, steady path. And hey, isn’t slow and steady supposed to win the race?
“I’m no economist, but I do run a small coffee shop, and what I care about is how much my suppliers charge me and whether people are willing to spend on their daily latte. Under Trump, I saw my costs rise because of tariffs, but people still spent money. Harris seems more focused on helping regular folks, but I worry about the long-term impact of her policies. Either way, I just hope whoever takes office keeps the small businesses like mine in mind—we’re the backbone of this economy.” – Sarah Jenkins, 34, Austin, Texas
What the Economists Say: Will We See a Recession?
As for the dreaded “R” word—recession—the economists have some reassuring news. The average probability of a recession in the next 12 months has actually fallen to 26%, down from 28% in July. So, despite the looming threats of tariffs, tax cuts, and deficits, the economy seems to have a bit more runway left.
Interestingly, economists also gave Federal Reserve Chair Jerome Powell a bit of a pat on the back. His approval rating jumped to 45%, a big leap from the 20% he received in October 2023. Maybe we’re all starting to feel a little more confident about where things are headed—or maybe we’re just grateful that someone’s at the wheel, trying to keep us from crashing.
The Bottom Line: Trump vs. Harris, Who’s Got Your Wallet?
At the end of the day, whether you’re rooting for Trump or Harris, the economic outlook is clear: Trump’s policies might give you a short-term high, but be prepared for the hangover. Harris’s approach is less flashy but promises more stability. It all comes down to what kind of economic rollercoaster you’re in the mood for.
If you love the thrill of tariffs, tax cuts, and deficit spending, then Trump’s your guy. But if you prefer a slow, steady climb towards economic stability, Harris’s policies might be more your speed. Either way, buckle up—it’s going to be a bumpy ride.
