Biden Harris Trump economy – Key Policy Impacts

The Economic Landscape: Biden, Harris, and Trump

The two candidates are worlds away when it comes to taxes, deregulation and DEI. But in other key areas, they have expressed goals without fully articulating how they plan to achieve them.

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Throughout President Joe Biden’s tenure in the White House, inflation has been the prevailing economic concern. This focus on inflation has overshadowed other significant elements of Biden’s economic strategy, which includes a robust labor market, improved economic conditions for lower-income workers, and substantial investments in green energy, infrastructure, and domestic manufacturing.

Biden’s Economic Achievements and Challenges

Despite these accomplishments, persistent inflation and rising prices have kept Biden’s approval ratings low. Coupled with concerns about his age, these factors ultimately led Biden to withdraw from the 2024 presidential race.

Trump's Economic Legacy and Future Promises

Former President Donald Trump, now the GOP nominee, boasts his own economic track record. His tenure was marked by significant tax cuts, deregulation, and trade wars, particularly with China. Trump is doubling down on these policies, promising more of the same, along with mass deportations of undocumented immigrants. Many economists argue that an increased supply of foreign-born workers has helped stabilize the labor market in recent years.

Michael Brescia, CEO and co-founder of Cerus Markets, notes, “Trump appears to be promising similar policies and actions if he is elected again. Whether markets reward or penalize him for that is anyone’s guess. Academics and common sense might tell you higher tariffs and increased debt aren’t good for stocks or the dollar. But equity markets brushed those concerns off during his first term.”

Kamala Harris: The Democratic Standard-Bearer

Vice President Kamala Harris, now the presumptive Democratic nominee, is tied to the Biden economic agenda but is also introducing her own ideas, focusing on family-friendly policies like paid leave and child care support. Harris aims to address the practical issues faced by working families rather than engage in complex policy debates. However, any legislative efforts will face significant opposition if Republicans control either the House or the Senate.

Harris vs. Trump: Tax Policies

Trump favors significant tax cuts for corporations and the wealthy, proposing to lower the corporate income tax rate from 21% to 15%. In contrast, Harris has indicated she would like to raise the corporate tax rate back to 35%. Michael Linden, former executive associate director at the White House Office of Management and Budget, observes, “Lowering taxes on business and wealthy individuals has long been a cornerstone of Republican economics.”

Harris has pledged to adhere to Biden’s promise of raising taxes on the wealthy while sparing those earning less than $400,000. Nonetheless, she will need to find funding for expanded social programs.

Harris vs. Trump: Tariffs and Trade

Trump used tariffs as a tool in trade negotiations, particularly with China. He now proposes a broad 10% tariff on imported goods, with some items facing tariffs as high as 60%. Harris has not outlined a specific tariff policy, but the Biden administration maintained some of the tariffs from Trump’s tenure.

Harris vs. Trump: Deregulation and DEI

Trump advocates for deregulation, arguing that regulations stifle American industry. He has promised to reverse many of the green energy subsidies and mandates championed by the Biden administration. Trump and the GOP have also criticized diversity, equity, and inclusion (DEI) policies, which they believe hinder American companies. Despite this, domestic oil production has reached record levels during Biden’s administration.

Harris vs. Trump: Inflation and Monetary Policy

Trump has criticized Federal Reserve Chairman Jerome Powell for not lowering interest rates quickly enough and has promised to address inflation and lower rates, though he has not detailed his approach. Biden has remained largely silent on the Fed’s actions, focusing instead on the downward trend in inflation over the past year.

Allianz Trade warns that a Trump victory could lead to increased issuance of Treasurys to finance higher deficits, potentially offsetting the benefits of lower interest rates. They caution, “Markets may be underestimating the potential impact on inflation, monetary, and fiscal policies should Trump decide to double down on his more disruptive campaign pledges.”

Conclusion

As the 2024 election approaches, the economic policies of Kamala Harris and Donald Trump will be scrutinized closely. Voters will weigh the benefits of Biden’s investments in infrastructure and green energy against the challenges of persistent inflation. Meanwhile, Trump’s promises of tax cuts and deregulation will appeal to his base but raise concerns among economists about their long-term impact. The outcome of this economic debate will play a crucial role in determining the next President of the United States.