A Harvard economist is sounding the alarm on both former President Donald Trump and Vice President Kamala Harris over their economic plans that have taken aim at the ballooning deficit.
Despite an expanding fiscal crisis, neither candidate appears to offer strong medicine for bringing the deficit down to size now projected at $1.9 trillion by the 2024 fiscal year by the Bipartisan Policy Center.
Both Trump and Biden are short on specifics, said Erica York, a senior economist at the Tax Foundation.
York added, “I think the reason neither candidate is really talking about fiscal responsibility is because neither candidate is fiscally responsible. Both have left a lot of details unspecified, so there’s questions still about how Harris’s spending policies would stack up. Would Trump really repeal all of the green energy tax credits? Would he really impose all of the tariffs he’s promised?”
Of the 16 points in Trump’s plan, only one deals with the deficit, and it mostly focuses on extending tax cuts, reducing corporate taxes and exempting certain types of income like tips and overtime from taxation. Even though these measures are popular with voters, economists warn they can only increase the deficit — unless balanced by serious spending cuts. According to the Tax Foundation, Trump’s proposals would add $4 trillion to the deficit in the 1st decade.
As for Vice President Harris, the deficit is raised repeatedly in her economic agenda: and she makes repeated commitments to driving down the national debt with targeted tax increases on the affluent and corporations. But her policies — $25,000 housing subsidies for first-generation home buyers and raising child tax credits — might add to that tally. The proposals from Harris would too be reliant on deficit spending, according to the Tax Foundation and lead to a $1.5 trillion deficit in ten years.
The flagging interest in the deficit during the campaign cycle has Kimberly Clausing, an economist at the Peterson Institute for International Economics, worried.
“We face several challenges on the fiscal policy front, from debt and deficits to the need to compete with China, to the need to encourage entrepreneurship and work, and neither of the tax policy visions being outlined right now really come close to providing an answer to those challenges,” York said.
The problem is not just over the long-term, but has real-time effects. Growing deficits have the potential to drive interest rates higher, eroding America’s creditworthiness and leaving it less well positioned to respond to future crises. “Initially these were piling things on to what was like maxing out the credit card, and it gets a little harder to say yeah we really need some defense right now,” Clausing said.
Biden-Harris administration record government spending 2024 fiscal year budget House Budget Committee Republicans They project the plan would cost $82.2 trillion over a ten year period, which represents an 18% growth over historical spending levels.
“I don’t know whether to blame the candidates or the American attention span,” Clausing said. “Candidates have an incentive to cater to what the population wants to listen to, but there doesn’t seem to be a big drumbeat in favor of fiscal responsibility. And that’s a big contrast from some prior elections in at least my lifetime, where that issue was much more prominent.”
Harris’ campaign itself refused to comment, but the vice president has been sufficiently closing on economic management to register. But Trump still has a single-digit edge over Harris on economic matters in recent polls, with his advantage ranging from five points according to a Fox News poll to two points in an AP/NORC survey.
Her economic policies are still bad, his trumped-up campaign said. The budget of Dangerously Liberal Kamala Harris would pile an additional $17,000 billion onto the national debt through 2034 and contain a $4,900 billion tax hike—the largest in history—that would cost every American family nearly $40,000 per year,” Trump Campaign National Press Secretary Karoline Leavitt said. Baugh asserted that Harris’ policies would fuel inflation and cost already hard-hit families even more money to fill their gas tanks and shop for groceries.
With the 2024 election on the horizon, conversation around fiscal responsibility and maintaining a balanced national budget grows in intensity as both sides demand more specifics from each candidate.