RALEIGH, North Carolina – Vice President Kamala Harris on Friday outlined the economic policies she will implement in her first 100 days in office – and they include an estimated $1.7 trillion in handouts and government price controls on food in the face of devastating inflation under the Biden-Harris administration.

Her economic plan includes measures to give first-time homebuyers $25,000 in down payments and tax breaks of up to $6,000 for low- and middle-income families who have a child in their first year. Harris did not say what incomes are considered “low” and “middle.”

Housing subsidies alone are “absolutely inflationary” and would “drive the $2 trillion deficit even higher,” Brian Riedl, a senior economist at the Manhattan Institute, told the Washington Post, citing the budget deficit already forecast for 2024. These subsidies account for only $200 billion of the total $1.7 trillion promised to voters.

“Reckless” alms

A number of economists The Post spoke to have already sharply criticized the high costs of the plan in the face of an already weak economy.

“The CRFB estimates make clear that Harris’ agenda – like Biden’s before it – will be fiscally reckless and economically damaging,” Adam Michel, director of tax policy studies at the libertarian Cato Institute, told the Washington Post.

“Writing big checks to people and enforcing price controls is a recipe for increasing demand and decreasing supply, which leads to shortages and necessitates rationing,” Michel said. “The $6,000 child tax credit is the next step in the child tax credit arms race, where Republicans and Democrats are trying to outdo each other by writing Americans bigger and bigger checks. It’s only going to get more expensive from here on out.”

“It’s very reckless to add this kind of debt to the mountain of debt we already have,” Joel Griffith, an economic researcher at the Heritage Foundation, told the Post, referring to the growing federal deficit, which currently stands at $34 trillion and is expected to reach $50 trillion by 2034.

The nonpartisan Tax Foundation expressed particular concern in an analysis about the lack of details it provided on where the funds for the handouts would come from.

“Harris’ agenda lacks details on how her proposed tax subsidies and expansions of federal programs will be financed, risking worsening debt trajectories,” the foundation said in an analysis. The total cost of the proposals would likely exceed $2 trillion over the next decade, which, if deficit-financed, would put upward pressure on inflation and lead to a further extension of the Federal Reserve’s high-interest rate policy.”

Harris also proposes tax breaks for companies that build affordable housing and for Americans who build their own homes. She plans to build an additional $3 million worth of homes over the next four years.

“Harris’ tax agenda is problematic for three main reasons: It would embed social policy and spending even more firmly in the tax code, it would subsidize homebuyers rather than address supply constraints, and it does not provide adequate compensation for the subsidies, exacerbating unsustainable debt levels,” the Tax Foundation said.

EJ Antoni, a finance scholar at the Heritage Foundation, told the Washington Post that “the Harris agenda is even worse than the Biden agenda: It means more spending, more borrowing and more money printing to pay for it all.”

“The economy is already suffering from an increased regulatory burden due to the over-regulation of the last three and a half years, and this program would drive up those cost increases even further.” “Harris’ economic proposals are a recipe for higher inflation and widespread shortages of the basic necessities of life, like food and housing,” added Romina Boccia, director of budget and social policy at Cato.

Price controls

The Trump campaign team particularly criticized her price control policies, calling them “communist” and comparing her proposals to those of authoritarian leaders in Venezuela and Cuba.

“When the government steps in, takes over food production and sets prices, it inevitably leads to food shortages and even famine,” economist Kevin Hassett said at a Trump campaign press conference.

Harris blamed high food prices on supply chain disruptions during the pandemic, but acknowledged that costs have remained high even as logistical problems have improved in the years since the peak of the COVID pandemic.

“A loaf of bread costs 50% more today than it did before the pandemic. Ground beef has gone up by almost 50%,” she said, oddly referring to the lower costs under the Trump administration.

For this reason, they believe that nationwide price caps are necessary for the first time in US history.

“We know that many Americans are not yet seeing progress in their daily lives. The costs are still too high, and on a deeper level, too many people are finding it so hard to get ahead, no matter how hard they work,” Harris said at her campaign rally in Raleigh.

“As president, I will focus all of my energy on creating opportunities for the middle class that strengthen their economic security, stability and dignity. Together, we will build what I call an opportunity economy.”

But economist Stephen Moore stated in Trump’s campaign speech that “the average margin of a grocery store or 7-Eleven on selling groceries is between two and three percentage points,” and predicted that “many of them would go out of business” if price controls were implemented.

Riedl agreed, telling the Washington Post: “Price controls don’t eliminate inflation – they just delay it, while creating enormous shortages in the meantime.”

The Trump campaign team emphasized that Harris is currently vice president and has been in charge of the economy for the past three and a half years.

Harris argued that Trump did not make any concrete policy proposals in his economic speech on Thursday.

In his speech outside a grocery store, Trump blamed Harris for the current economic situation and announced that upon his return to office, he would “drill, baby, drill” and lower energy prices.

He also said he would release federal land for the construction of additional housing and would work to reduce energy prices by 50%.

Harris has not yet disclosed her energy policy; her campaign team has only told reporters that she has revised her position during the 2020 presidential campaign, which called for a ban on fracking.

Capping of drug costs

Harris also promised to work with her vice presidential candidate, Minnesota Governor Tim Walz, to ask states to “cancel medical debt for millions of Americans and help them avoid such debt in the future.”

Specifically, Harris wants to cap the cost of insulin at $35 and the deductible for prescription drugs at $2,000 for everyone, not just seniors.

In addition, she wants to “accelerate the pace of Medicare prescription drug negotiations,” which has been a priority for President Biden.

Harris joined Biden at an event in Maryland on Thursday, where she sought to tie herself to Biden’s relatively popular drug policies even as her campaign team tried to distance her from the current president on other issues.

The event was apparently to celebrate the announcement of price reductions on ten prescription drugs for seniors enrolled in Medicare Part D. These savings will take effect in 2026 and reduce costs for both consumers and the government.

reception

Despite economists’ concerns about the consequences, the plan was well received by their audience of supporters at the North Carolina event.

Attendee Dylan Neil noted that Harris’ ideas for curbing price gouging “are definitely a good strategy. A lot of larger organizations can find a way to manipulate certain systems, and I think that’s definitely a problem, and I think that’s a really good suggestion from her.”

Asked why Trump had called Harris’ plan to end price gouging “communist,” Sangimino said that was “crazy, just like Donald Trump.” Neil added, “I don’t think that’s communist at all.”

Jessica McKoy, a 30-year-old pharmacist from Raleigh, told the Washington Post she welcomed Harris’ plan to “stop inflation,” adding that she was eager to learn more about the “plan to cut cost-of-living, food and gas taxes and represent the middle class.”

For Meg Sangimino, a content marketer in her late 20s, “the child tax credit sounded very promising,” adding that it was the first time she had heard of the idea. “It seems like it’s really focused on families, particularly the middle class. I find that very appealing,” she said.

A central aspect of both Trump’s and Harris’s campaigns was to appeal to the middle class.

When asked if she thought it was fair that people with children pay less taxes, Sangimino said, “Yes, I do. People with children have many costs that people without children don’t have.”

“We are childless and I think we see the financial benefits of not having a child,” she said. “And so I think the people who have children deserve a little more relaxed period.”