Vice President Kamala Harris laid out an ambitious economic agenda for her presidential campaign last Friday. I would like to write about 2 main points.
$25,000 towards down payment for purchase of home by a first-time buyer to tackle affordable housing crisis. Kamala says it will help more than 4 million people. No details about how this will work. (No idea if this is only for US citizens OR for tax paying non-citizens like H1B people also,) It has both supporters and critics.
Alexander Gorlin, the famous author on affordable housing likes this idea. But some economists feel this plan would just further inflate the real estate market, put the U.S. further into a financial deficit, and ultimately be another reason for the government to increase taxes.
Federal ban on price gouging on food and groceries. She said this is the reason for higher prices now and inflation. Kamala wants to introduce Price Control Plan to stop “price gouging”.
A Harvard Economist Jason Furman who worked for President Obama said: “This is not sensible policy, and I think the biggest hope is that it ends up being a lot of rhetoric and no reality. There’s no upside here, and there is some downside.”
Price controls are government-mandated minimum or maximum prices set for specific goods and services. If this is implemented, supply and demand will no longer determine prices or profit levels. Price controls can lead to problems such as shortages, rationing, inferior product quality, and illegal markets.
Richard Nixon, a Republican President, in 1971, introduced wage and price control. It ended in utter failure and people paid the price
Price controls by the Government are established only in Communist and Socialist countries. Not in the free world. (While writing this I am thinking of Kamala Harris’s dad Dr. Donald Harris, a professor at Stanford University. He was a Marxist Economist.)
No tax on tips and child tax credit are borrowed from the Republican Party.
Well, the down-payment scheme may result in inflating the real estate market....it's a waiting game now..!!!
ReplyDeleteThanks for your comments Swrarna. Though it is "anonymous", I know it is you. You are correct.
DeleteHehehe. I can guess my regular reader from the writing style.
DeleteInteresting. Another new information in your blog is Professor Donald Harris was a Marxist economist
ReplyDeleteThanks for your comments Gowri. He was a commie. Like dad like daughter.
DeleteElection time in India and also budget session in India is full of rhetoric and realization of the rhetoric never happens. Let's hope the same doesn't apply to USA. The first policy you mention of a down payment towards housing by first time buyers is a good policy I would think.
ReplyDeleteThanks for your comments sujata. Yes, it looks like a good idea.
DeleteSG: These are some interesting points.
ReplyDeleteThe Dems always have great plans and big plans but where is the money coming from and where is it going?
Kumalot Harris and the Dumbocrats are going down this year because they are experts at spending other peoples money and telling people whatever they want to hear when on the campaign trail.
Regards,
Slick Willie Brown
Thanks for your comments Willie. Are you still active? Going to Chicago to have a good time?
DeleteTax on Tips - Do they track the amount of tips as well?
ReplyDeleteThanks for your comments Rajesh. Income from tips are self-reported. The employees should keep daily tips information on Form 4070. The Internal Revenue Service will audit if they find it abnormal.
DeleteEconomics is a very tricky subject. I find it very difficult to understand!
ReplyDeleteThanks for your comments Pradeep. I am sure you must have heard this joke. Put 10 economists in a room and you will get 11 opinions.
DeleteWhatever agenda are given, the giver should be clear about the course which he/she will take into account. Nice topic.
ReplyDeleteThanks for your comments Sarala
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