As the United States is now one week away from the presidential election, an important topic to take a look at is the economy. “The economy” has consistently ranked as the top issue for voters heading into this election cycle, and with good reason. Ever since the pandemic, the U.S. economy has been all over the place.
In the later parts of the Trump administration, the United States hit a staggeringly low inflation rate of 0.1%, a staggeringly high unemployment rate of 14.8%, and a borrower’s dream 0.05% Federal Reserve interest rate. All of these statistics are reflective of an ice cold, contracting economy due to COVID-19, and the consequential shutdown of the global market. However, as the United States and the rest of the world emerged from the pandemic and things started to get back to “normal”, the economy did a complete 180° turn.
During the early to mid parts of the Biden administration, the United States experienced an extremely high inflation rate, reaching a skyrocketing 9.1% in June 2022, a falling unemployment rate, adding millions of new jobs on top of the return of workers from COVID-19, and a less-than-ideal Federal Reserve interest rate due to the high inflation rate. These statistics reflect a red hot, expanding economy, resulting from the end of mandated quarantines and reemergence of the global market.
Fast-forwarding to the most recent, September 2024, economic statistics, the inflation rate is at 2.4%, the unemployment rate is at 4.1%, and the Federal Reserve just cut the interest rate to 5.13%, all numbers reflecting a strong and improving economy, positioning the U.S. as the current economic envy of the world.
However, despite these numbers being published by credible agencies, Kamala Harris and Donald Trump prefer to interpret them in dramatically different ways. Harris hopes to capitalize on the improving economic state and constantly stresses to voters the success the Biden administration has had in stabilizing the economy. Trump, on the other hand, consistently overlooks these numbers as he paints the picture of a suffering and wrecked economy, doing this in the hope that his past economic success will persuade voters that he is better for the economy than Harris and the Democrats.
When it comes to Kamala Harris’ economic plan, she has taken a more liberal approach by zeroing in on using the government to assist middle and lower class citizens while making the ultra-wealthy and big corporations pay their fair share. In terms of taxes, the vice president plans on restoring and expanding the Child Tax Credit and the Earned Income Tax Credit and raising the long-term capital gains tax to 28% for those earning $1 million a year or more. When it comes to assisting middle-class families, she plans to provide first-time home buyers with up to $25,000 and expand the startup expense tax deduction for new businesses to $50,000. In terms of taking on corporations and protecting workers, Harris plans to place a federal ban on price gouging for food and groceries and sign extremely pro-union legislation into law.
When it comes to Donald Trump’s economic plan, he has taken a much more conservative approach. Similar to his first administration, Trump plans to pursue an extremely pro-business stance, decreasing regulations and cutting taxes for all earners. In terms of taxes and tariffs, the former president plans to bring back all of his tax cuts from 2017, including further lowering the corporate tax rate from 21% to 15%, and impose a universal tariff of 10% to 20% on all imports. When talking about social programs, Trump vows not to make any cuts to Social Security or Medicare but opposes Biden-era student loan forgiveness programs. He also plans to bring down the cost of energy by expanding drilling for oil and gas and reducing government regulations in the sector.
However, it is essential to note that the odds of Harris or Trump being successful in enacting their plans are largely dependent on which party has control of the House of Representatives and the Senate, which will also be determined this November. A Democrat majority in both chambers would benefit Harris while a Republican majority would benefit Trump. A split Congress would pose a challenge for either candidate as they would be forced to reach across the aisle to get legislation passed. Nevertheless, the decision this November is in the hands of the electorate as we head into what many are considering “the most important election of our lifetimes.”