In the first interview since Joe Biden stepped down from the presidential race, Kamala Harris stated on CNN that she will “do what we can to support and strengthen the middle class” on Day One, and goes on to say the American people are ready for a “New Way Forward”.
A New Way Forward.
What exactly does this mean? What exactly will Kamala’s “New” way forward look like?
With just a glimpse of the policies she promises to pass, we can easily paint a pretty clear picture of what this “New Way Forward” will look like, and it does not look bright.
It looks dark for the American people, and especially the American middle class.
Let’s break it down:
In an attempt to aid the American people from the increasing cost of houses, Kamala Harris has promised $25k to “first generation home-buyers”.
According to ABC News, “The campaign is vowing that during its first term, the Harris-Walz administration would provide working families who have paid their rent on time for two years and are buying their first home up to $25,000 in down-payment assistance, with more generous support for first-generation homeowners.”
However, Ken Johnson, a Professor of Finance and the Walker Chair of Real Estate at the University of Mississippi said that throwing money in the form of ‘down payment assistance’ would be like “throwing gasoline on an already on-fire housing market.”
“The real symptom of what's going on is that we're short in supply. We're dangerously short in supply. We just cannot build homes fast enough,” says Johnson. “You can’t make it easier for people to buy homes, and offer easier credit to buy homes, when you have the housing market so overpriced.”
Taking into account what Ken Johnson said, giving first generation homebuyers $25k as a down payment assistance will only increase the demand in the already short-supply housing market.
This means Kamala’s $25k First Generation Homebuyer Policy will only worsen the “short supply” issue we suffer today because more people will have the ability to purchase houses with the $25k given to them by the Harris-Walz administration, which will only cause more inflation in the housing market.
Kamala’s solution to the inflation in the housing market due to her $25k subsidy is to incentivize homebuilders to build more homes, in the hopes that supply will increase so that home prices fall.
Kamala proposes tax credits for homebuilders to offset the inflation risk by stimulating new construction, but this will not be enough.
Although he was referring to Kalama’s Price Gouging Ban, Joshua Hendrickson, an economist at the University of Mississippi, suggested that the government injecting the economy with money will naturally cause inflation and result in higher prices in the housing market.
“Such broad increases tend to be the result of expansionary monetary or fiscal policy—or both,” said Hendrickson. For example, the 25k first generation homebuyer policy Kamala promises the American people.
Kamala’s 25k first generation homebuyer policy is going to create general inflation, impacting the prices of more than just homes.
Beyond this, it’s important to note that “supply and demand” cannot be avoided.
If builders are given a tax credit for building more homes, then their suppliers of resources are going to have to increase their prices due to the higher demand of resources required to build these homes.
For example, According to Consumer Affairs, U.S. construction spending reached about $2.09 trillion in February 2024. This was more than a 10% increase from February 2023.
Furthermore, Business intelligence firm Gordian found that the vast majority of construction materials’ prices went up substantially. The cost of construction materials increased by an average of 19%.
This is simply “supply and demand” at work, which is a natural economic principle.
Incentivizing home builders only means a higher demand for resources to build more homes. With higher demand and a shortage of supply in resources, we will see even higher prices in an already inflated market.
Kamala’s economic promise to the American people will ultimately backfire and lead to the continuation of increasing home prices once again.
To add insult to injury, Kamala’s “New Way Forward” does not stop there.
Kamala Harris is also advocating for a national law banning firms from charging excessive prices on groceries, which known as the “Price Gouging Ban”.
Banning Price-Gouging might be a popular idea among voters, but many economist have already spoken out against Kamala’s initiative.
New York Times reports that Former Obama Administration Economist, Jason Furman, has warned against the ban.
Economist Furman suggested “the plan would prevent the economy from adjusting and keep competition artificially regulated.”
This is the administration Kamala Harris speaks so highly of, yet she is acting against the advice of an Economist from that very same Administration.
Jason Furman continues to suggest “If prices are not allowed to increase in response to demand, new companies will be hesitant to enter the market to increase supply.”
Simply put, if Kamala Harris aims to regulate prices for grocery stores to prevent “Price-Gouging”, a list of things can happen:
Less businesses will open up, because they will hesitate to enter the market.
As a result, there will be more demand and less supply, which will further increase prices! Leading to more inflation!
With less businesses and less supply, we will have to suffer an economy with less jobs created than could have been created without Kamala’s initiative.
There will be those who say she does not want to regulate grocery store prices, but there is no other way to prevent the “price-gouging” Kamala Harris claims is causing the inflation we suffer today.
Truth be told, the inflation we see today is not caused by Price-Gouging, but by the natural market forces of “supply and demand”.
Joshua Hendrickson, an economist at the University of Mississippi said, “if prices are rising on average overtime and profit margins expand, that might look like price gouging, but it’s actually indicative of a broad increase in demand.”
Former Obama administration economist, Jason Furman himself said, “egg prices went up last year— it’s because there weren’t as many eggs, and it caused more egg production.”
According to Free Beacon, other economists are telling NY Times that “although rising food prices may look like corporate price gauging, the spike is natural due to increased consumer demand following the pandemic and the result of expansionary fiscal policy such as the stimulus checks that came out in 2021.”
So, let us paint the picture clearly.
Higher Home Prices.
Higher Grocery Prices.
Less Businesses.
Less Jobs.
This is the perfect recipe for an America where US Citizens are left jobless, homeless, and standing in breadlines.
This is Kamala’s New Way Forward. The destruction of USA.