Winners of the Nobel Prize in economics are backing Vice President Harris’s vision for the economy, calling it “vastly better” to that of former President Trump.
“Harris’s economic agenda will improve our nation’s health, investment, sustainability, resilience, employment opportunities, and fairness,” economic laureates Daron Acemoglu, Esther Duflo, William Nordhaus and 20 others wrote in an open letter.
The economists criticized Trump’s plan for the economy, calling out his plans to greatly increase tariffs, which has been met with staunch resistance from many policy experts in Washington.
“His policies, including high tariffs even on goods from our friends and allies and regressive tax cuts for corporations and individuals, will lead to higher prices, larger deficits, and greater inequality,” they wrote.
Economic agendas from both Harris and Trump have not been fully laid out yet, but they have been given a few defining features.
Harris wants to go after price gouging, help aspiring entrepreneurs start small businesses and provide incentives for first-time homebuyers, among other proposals.
Trump is promising to alter the U.S. revenue structure by imposing a general tariff on imported goods. He has also pledged a number of new tax breaks.
Trump’s plans would add significantly more to the U.S. deficit than Harris’s, according to various budgetary summaries and analyses.
U.S. debt levels ballooned following the pandemic, as the government under both the Trump and Biden administrations sent out trillions in fiscal stimulus, both to individuals and businesses.
That stimulus contributed to the inflation that weighed on President Biden’s economic approval ratings throughout his term. As supply chains returned to normal and the stimulus was absorbed into the economy, prices have since fallen back down toward a 2-percent annual increase.
A monetary tightening cycle undertaken by the Federal Reserve helped to keep inflation expectations anchored.
The fact that inflation has come down without a recession has been hailed by economists as a serious achievement and could be a hallmark of the Biden administration’s legacy.