Vice President Kamala Harris and former President Donald Trump each have a “wish list” of economic ideas to boost Americans’ pocketbooks and help the middle class.
But after Harris’ first interview as the Democratic nominee on Fox News with “Special Report” host Bret Baier, one prominent economist argues that it’s clear her ideas “pander” to voters and will likely be difficult to enact.
“A lot of the responses relied upon these outside experts, rather than talking about the merits of the policies… The dynamics of this were such that Vice President Harris, of course, had some messages that she wanted to get through, which focused not as much on her plans, but more on attacking former President Trump,” former U.S. Securities and Exchange Commission chief economist and current Carnegie Mellon University professor Chester Spatt told Fox News Digital.
“I think she probably should have addressed more where they felt they had economic success. I think that would have been helpful to voters,” he continued. “And to what extent, of course, are the policies, hers or the president’s, are these distinguishable? I think she certainly should have highlighted more where she would have different policies.”
VP KAMALA HARRIS RESPONDS TO WHY MORE AMERICANS TRUST TRUMP ON THE ECONOMY
On Wednesday night, Harris mentioned that reputable sources like Moody’s, the Wall Street Journal, Goldman Sachs and Nobel laureates have indicated her policies would “strengthen” the economy. This is mostly correct, as surveyed economists note growth under both administrations, weighing that Harris would add less to the U.S. deficit at $1.2 trillion over 10 years, versus Trump’s deficit addition at $4.1 trillion.
The vice president also highlighted her plans for small businesses, taking care of young parents and bolstering affordable housing. This includes up to $6,000 for a child tax credit, $25,000 credit for first-time homebuyers and a small business tax deduction anywhere from $5,000 to $50,000.
“They’re a bit of [a] wish list, and they’re a little bit of pandering. But they’re important,” Spatt started to explain. “It’s clear that such a credit is going to have very inflationary effects with respect to the prices of starter houses, and may lead to some entry into producing starter houses, but it’s clearly also going to help inflate up the price of starter houses.”
“You put a bunch of extra money in people’s pockets, and it doesn’t leave prices unchanged, quite the contrary. And in some cases, it may be encouraging people to buy who really don’t have the collateral needs to sustain that.”
An October survey of Wall Street Journal economists showed they overwhelmingly think inflation, interest rates and deficits would be higher under President Trump. Spatt pointed out that most economists believe in free global trade and have unfavorable views on tariffs.
“He’s suggesting that this is a negotiating tool. Now, of course, something is an effective negotiating tool only if you want to implement it,” Spatt said. “And he’s sort of signaled in the first administration he’s willing to implement it.”
DONALD TRUMP: WE’VE BEEN ‘SCREWED’ ON TRADE BY MEXICO, CHINA, EUROPEAN UNION
Though admitting that both campaigns “don’t bring out the best” of available economic policy, Spatt noted there’s one tax proposal from Harris that average Americans should be “very concerned” about.
“This is, I think, one of the weakest aspects, actually, of the vice president’s program… This is absolutely a terrible idea,” he reacted to the potential 25% tax on unrealized capital gains.
“It will have adverse impacts on investing and the willingness to invest. I also think that with respect to the kind of investments that people have made in the past, such a dramatic change in the rules of the game, I think, really under-cut the credibility of the time consistency of policy in the U.S.,” Spatt explained.
“Changing the rules in such a dramatic way, I think is really quite problematic. I also think that this particular policy regime would be very hard to implement,” he added. “I do think that middle class people ought to be concerned about the environment for business investing.”
Other sectors of concern for Spatt include immigration cost spillover, energy and liquefied natural gas production, and a lack of discussion from the candidates about Social Security insolvency.
“This is an issue that neither presidential candidate is taking seriously… There’s built in, basically, about a 20% reduction in benefits, but I think that’s not projected for about another decade. And so I think at that point, the issue will finally engage politicians,” the economist said.
“I think voters mistrust authority,” Spatt continued, “and I think President Trump’s campaign and candidacy really, even over the last decade, has highlighted a mistrust of authority. And indeed, a lot of times the authority figures don’t get things exactly right.”
The biggest economic issue for whoever the next president is, however, will come down to how they handle a rising deficit, according to the professor.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
“It’s about deficit and debt and how to have a more coherent structure for that. But we really don’t hear, at least directly, we don’t hear so much about that on the campaign trail. And I don’t consider ‘so reliable,’ these expert projections,” Spatt said.
“I think it’s important that candidates try to frame their thinking in terms of economic principles. But that doesn’t mean just the traditional principles… it is really valuable to be a U.S. citizen. And I don’t know that our policies at all reflect that whatsoever,” he expanded.
“In the energy area and the regulation area, these are right for relatively short-term review. And some – but not all these issues – don’t necessarily require congressional legislation. A lot of the issues on the wish lists of the candidates focus more on things that would require legislation. That’s probably a good thing because, probably, many of them won’t happen.”
