Subscribe
Just one day before going into the televised debate with Donald Trump at ABC, Kamala Harris, the current Vice President and 2024 Democratic presidential candidate, has laid out her economic vision on the campaign website. To the casual observer, it might sound like a well-intentioned plan to bolster the middle class and promote equality. But if you peel back the rhetoric and examine the policies in detail, the underlying weaknesses begin to surface. One can respect Harris’ drive to address social inequality and rebuild the economy from the bottom up, but one can’t help but notice the glaring flaws in her proposed economic strategies. The truth is, Harris’ policies are rooted in outdated economic theories that, while popular in the Democratic base, could do more harm than good for the broader American economy.
Big Government, Big Taxes
One of the central tenets of Harris’ economic platform is her commitment to expansive government spending. She has championed massive investments in infrastructure, green energy, and healthcare. While the aim of these initiatives is commendable, the cost is staggering. Harris has proposed trillions in new government spending to finance these programs, all while advocating for tax hikes on corporations and high-income individuals to foot the bill.
The issue here is twofold. First, the reliance on increased taxes to fund expansive government programs is a short-sighted solution. Corporations and wealthy individuals are often mobile, and history shows that they tend to relocate when faced with overly burdensome tax regimes. This was famously demonstrated during the 1980s when many high-income individuals fled high-tax states like New York for lower-tax jurisdictions. If Harris succeeds in raising corporate taxes, similar outcomes can be expected—corporations moving their operations offshore or passing the increased costs on to consumers in the form of higher prices. Harris’ tax plan risks slowing economic growth and discouraging investment, which will ultimately harm the very workers she claims to protect.
Moreover, big government spending, when unchecked, leads to inefficiency and waste. The Green New Deal-style investments in renewable energy, for example, sound attractive, but we’ve seen how government subsidies and handouts can create distortions in the market. Remember the Solyndra debacle? That was a case where the government invested heavily in a green energy company that ended up going bankrupt, costing taxpayers over $500 million. Harris’ proposals are rife with similar risks. Massive government spending often picks winners and losers in the marketplace, leading to a misallocation of resources. The private sector is far more efficient at innovating and determining where resources should flow than the government, which is beholden to political pressures.
Welfare Paid By Future Generations
Another key component of Harris’ economic vision is the expansion of social safety nets. Her plan to significantly increase federal spending on healthcare, child care, and education is designed to create a more equitable society, but it risks bankrupting future generations. It’s easy to promise expanded benefits, but harder to explain how to pay for them sustainably.
Harris supports expanding Medicare and creating a public option, which sounds great in theory but carries enormous financial implications. Medicare is already on shaky ground, with projections showing that its trust fund will be insolvent in the not-too-distant future. Adding millions of new beneficiaries without fundamentally reforming the system will only accelerate its fiscal decline. The US cannot afford to expand an already unsustainable entitlement program without serious cost controls, yet Harris offers no substantive plan to address Medicare’s looming insolvency.
Moreover, her child care and education proposals (while addressing legitimate concerns about affordability) are built on the assumption that more government involvement will solve these problems. But we’ve seen time and again that increased government control doesn’t always result in better outcomes. Look no further than the US public education system, which has been under government management for decades yet continues to produce disappointing results in many areas, ranking below its European counterparts. Throwing more taxpayer dollars at these problems without fundamentally addressing the root causes of inefficiency and underperformance won’t fix anything.
Inflation? What Inflation?
Perhaps the most glaring omission from Harris’ economic platform is any real acknowledgment of inflation. Over the past couple of years, inflation has reared its ugly head in the US, driving up the cost of everything from groceries to gasoline. American families are feeling the pinch, yet Harris seems to believe that increasing government spending and raising taxes won’t exacerbate the problem.
In reality, her economic policies could very well pour gasoline on the inflationary fire. Increased government spending, particularly when financed by deficit spending, adds more money into the economy, driving up demand without a corresponding increase in supply. The result? Higher prices for consumers. Harris’ team has argued that her tax increases will temper inflation by reducing disposable income, but this misses the point. Inflation isn’t simply a problem of too much demand; it’s a problem of supply chain disruptions, labor shortages, and government overspending. By ignoring these structural issues, Harris risks worsening the inflationary pressures already plaguing the economy.
No Growth
The most frustrating aspect of Harris’ economic platform is the lack of focus on growth. The best years of the American economy have seen it thrive on innovation, entrepreneurship, and competition. But Harris’ policies seem to prioritize redistribution over growth. While addressing inequality is important, it cannot come at the expense of stifling economic dynamism. Policies that punish success (through higher taxes, burdensome regulations, and government overreach) are counterproductive. Instead of fostering an environment where businesses can thrive and create jobs, Harris’ platform appears to punish wealth creation in favor of expanding government control.
A free market, driven by self-interest, naturally allocates resources efficiently, spurring innovation, job creation, and wealth generation. Entrepreneurs and businesses, in pursuit of profit, compete to create better products and services, driving growth and raising living standards for all participants in the economy. Competition pushes companies to innovate, adopt new technologies, and improve efficiency, which in turn leads to the creation of new industries and higher-paying jobs. This leads to a rising tide of economic growth that lifts all boats, benefiting both workers and consumers. By fostering competition, markets drive down costs and improve access to goods and services, which helps alleviate poverty over time. That’s what Harris refuses to understand.
Policies that prioritize equality at the expense of dynamism (such as wealth redistribution, over-regulation, or heavy taxation) can stifle economic incentives. When businesses are taxed or regulated too heavily in the name of equality, the drive to innovate diminishes, entrepreneurship is discouraged, and economic growth slows. This ultimately limits the resources available for everyone, including those the policies aim to help.
In Conclusion
Kamala Harris’ economic policies may seem well-intentioned, but they are ultimately misguided. Her reliance on big government spending, expansive welfare programs, and tax hikes on corporations and high-income individuals will stifle growth, fuel inflation, and saddle future generations with a gigantic debt burden. While she promises a more equitable society, the cost of her proposals is too great to bear, and she probably knows it.
What remains to be seen is if the American people will be seduced by the prospect of Kamalanomics or if they will remember where the sad cocktail of hyperinflation combined with more and more government spending has led in the past. Trump may be spewing nonsense on some topics, but he is right when pointing out that Venezuela could be an accurate example of the results.