The 2024 US Presidential Elections are coming up in all its glory. On the one hand, you have the Democratic nominee, Vice-President Kamala Harris. On the other hand is the Republican candidate, former President Donald Trump. Both candidates have been fierce in their battle to woe voters and secure the most powerful seat in the world – the POTUS. 

But while rhetoric and image have played their role to sway voters, the stance of the candidates on key issues still remains the deciding factor of victory. One such key issue is money.

The American Tragedy

For decades, Americans have enjoyed the status of living in the most powerful country in the world. This pride had often overshadowed the economic woes of an average American citizen. However, in recent years, the US has faced rising competition from China while also witnessing many dents in its image in front of the world. And to add salt to the injury, the economic situation has worsened.

The US saw a great decade, in terms of inflation. for the better part of the 2010s. Once the after-effects of the 2008 Financial Crisis had receded, the inflation rate fell down to 0.5 – 2.5 percent between 2012 and 2020. At the same time, the US GDP grew steadily at a decent rate of 2.2 – 2.3 percent. Things were looking well, until March 2020 – when the pandemic struck.

The COVID-19 pandemic left the American economy in disarray. Supply was hampered, demand died off, there was a labor shortage, and the world came to a halt. This was followed by heavy government spending on stimulus packages which helped a lot of people but also increased inflation. The Russian invasion of Ukraine affected global trade – particularly gas prices – while the semiconductor shortage impacted the supply of many tech products. 

What Americans Expect

Most Americans have few common economic issues they would like the candidates to address. While the inflation rate has reduced from 2021, the prices are still much higher than they were before the pandemic. The salaries of people, however, have not increased at a similar pace. Thus, inflation remains one of the core problems for the people and something that the next president will have to address with concrete plans.

Unemployment, while low, still remains the major factor for those suffering from it. Racial wealth inequality is also a major issue for the minority demographics. Many people would like lower tax cuts – particularly for the lower income brackets. Others would prefer more taxes on the rich. Homeownership is also a rampant issue among urban Americans, as home ownership in the US has only slightly recovered after the dismal low point in 2016. However, the prices of properties have continued to rise even after the pandemic. 

Kamala Harris On Your Dollar

The Biden-Harris inherited an economy suffering from the pandemic with high inflation rates. Over time, the inflation has come down slightly, but not enough. The administration has been focusing on keeping the labour market tight and ensure employability, which resulted in the lowest unemployment rate in a long time. Many government policies were enacted to subsidize specific areas, thereby helping millions of people. However, the administration failed to tame the overall inflation rate.

For the presidential term, Kamala Harris has promised a hands-on approach towards specific problems. For instance, she has promised mortgage assistance to first-time homebuyers, tax credits to couples becoming parents for the first time, and a ban on price gouging on essentials like food items. While these policies are bound to benefit many people, most economists agree that they would do little to lower the inflation rate. 

Donald Trump On Your Dollar

In his first time, Trump inherited a very strong and stable economy. Inflation was low, interest was low, and unemployment was low. Despite this, Trump enacted many protectionist policies like tariffs on Chinese imports. China retaliated with tariffs on American imports, and ultimately the common people had to cough up extra. Trump also brought tax cuts on corporations which led to a bull run in the stock market but ultimately would have increased interests.

For his next term, Donal Trump is making similar promises. He has continued insisting on import tariffs (60% for China, 10% for the rest). While a popular rhetoric, the policy is likely to suffer the same fate counter-tariffs and increased prices; unfortunately, this time it would be for all products, not just Chinese ones. Trump has also continued the legacy of “America First” with many plans, the most prominent of which is the increased oil drilling on federal land within the continental United States. However, it must be noted that increased oil production would bring down global oil prices, thereby making oil drilling all the less profitable for American companies. Thus, the plan is unlikely to be enacted. 

What The President Could Actually Do

It is always a sight to watch presidential candidates make grand promises on the wonders they would do for your pockets. At the same time, it is also a far too common sight of people blaming the presidents for ‘ruining the economy’. That begs the question: what could the president actually do to improve the economy?

The anwer is, sadly, not much. The American economy is built upon robust free-market capitalism. The government does not – and should not – interfere much with what’s being sold or bought. Sure, there are many government-mandated regulations, but that’s about it. This means most of what happens in the economy is decided by the two macroeconomics gods: Supply and Demand. The president couldn’t directly control either. 

Even if there was a single entity that could tame inflation, it would not be the president but rather the Federal Reserve. While it is true that the president nominates the chair of the Federal Reserve, historically it hasn’t had any direct influence on monetary policies. The fiscal policy can have a significant impact on the economy, but it is technically set by the cabinet members and the president is only part of it in an advisory capacity.

So, on paper, it might seem that a president can’t really improve or worsen things for your pockets. You would be wrong. While the president’s direct role in the economy is very limited (because our founders wanted a free market country), there is a lot he/she could influence indirectly. The fiscal policy has almost always had the key issues introduced by the president at the time. Through regulations or new plans regarding areas under federal jurisdiction, the president could influence the market as well as the economy of the country. This includes regulations on international trade, subsidies on specific commodities, federal expenditure on specific industries, and so on.

It would be interesting to see how the next president – Harris or Trump – tackles the economic challenges of America.