Kamala Harris' economic plan

Long on rhetoric, short on substance

Harris released elements of her economic plan today which immediately found criticism in an unlikely place - @CNN.

Despite the criticism the plan is well-designed to attract votes, and little else. Harris proposes a $25,000 payment to first time home buyers which will appeal to many young Americans struggling to get enough money together for a down payment on a new home, but does nothing to reduce the cost of homes. $25,000 bribe to young voters will probably capture up to 1 million votes half of which would have gone to Republicans before the announcement. American home sales run 4 million a year and about one quarter of them (or less) would be purchased by first time buyers if they could stomach the mortgage payments. The cost of the program if the 1 million figure is right is about $25 billion which in U.S. government spending is pin money.

In response to a proposal by J.D. Vance on the Trump ticket to provide a $5,000 child tax credit, Harris ups the ante and bids $6,000 per child but only during their first year of life. Sounds like more but is in fact less than the Vance proposal.

To control grocery prices, Harris proposes a regime of “price controls” and bans on “gouging”. There is scant evidence of any “gouging” by grocery stores whose average profit runs 1.2% of sales, but grocers are a favorite whipping boy of the left.

Harris also proposed to somehow incent the building industry to build 3 million new homes. It is unlikely to see the light of day but makes for a great campaign speech. Builders will build only what it is profitable to build and rhetoric won’t pay the mortgage. If it was profitable to build more homes, builders would already be building them. U.S housing starts fell to an annual rate of 1.28 million in July 2024, a far cry from the 3 million promise she is touting.

Harris’ housing plan has about as much substance as Trudeau’s here in Canada - which is none. According to CHMC, Canadian housing starts are projected to decline in 2024.

Big words, little action.

Harris promises higher taxes on corporations. Those will manifest themselves in higher prices for consumers since the left fails to understand that corporations don’t pay tax, they collect it, and pass it on in price. Higher corporate taxes will simply raise the cost of living for the low income people Harris pretends to want to assist.

Harris’ copy of Trump’s proposed “no tax on tips” is a smart move, neutralizing the advantage Trump was winning with service industry workers. It won’t tip the scales in November but a lot of waiters, hostesses, waitresses, hairdressers, caddies, manicurists, etc. will welcome the move. Harris seems to forget that she was the Senator to promote the bill to expand the size of the IRS to investigate people receiving income in the form of tips to ensure they paid taxes on those tips. Voter may have less amnesia.

Campaign promises are fragile in that many die post election on both sides of the house. The real question in November is who will occupy the White House and that has turned into a real horse race with both Harris and Trump with about equal chances of winning. The next ten weeks to election day will be interesting as we have a few debates, the usual name-calling, and a plethora of promises sure to be broken by both candidates.

My bet is that Harris will win by a nose but I am not giving any better odds than even and will change my mind more than once as November 5, 2024 approaches.