Hello everyone, it's been a while since I posted something new.
Today, let's talk about inflation. For the past two years, inflation has become one of the biggest issues in the economy. Although inflation has become less intense now, people have not recovered from the shadow of inflation. Usually, the government would raise the interest rate regarding inflation because higher interest rates discourage people from spending money and lower the demand in the market.
In my first post about the Fed lowering the interest rate, I had to correct my mistake about lowering the interest rate to solve inflation (Don't worry, I just corrected my first article). After researching inflation, I realized that the Fed lowered the interest rate because they were more concerned about deflation. Sorry about my mistake.
The presidential election is approaching. The economy became a big part of the election topic because voters have not moved past the shadow of raising prices. In response, Trump and Harris both have their economic plans. Harris's campaign proposal includes expanding the child tax credit, income tax credit (for the lower and middle class), and premium tax credit and raising the corporate tax to 28 percent. However, to extract the money to distribute to people in need as credit, more income taxes would be paid every year on the annual tax return. No, free money does not exist.
Trump's economic plan includes extending the individual and business tax provision of Tax Cuts and Job Acts (TCJA), eliminating taxes on social security benefits, and lowering the corporate tax rate by 15 percent. Although people have more faith in Trump in terms of the economy after seeing the horrible economic condition during Biden's presidency, Trump's economic plan instead would increase inflation and worsen the economy, ironically, according to experts.
Both economic plans have some common effects such as less GDP, less household savings, hours worked, and an increase in debt. In terms of the predicted number value, Trump's economic plan loses more money according to experts.
reference links:
https://budgetmodel.wharton.upenn.edu/issues/2024/8/26/trump-campaign-policy-proposals-2024
https://budgetmodel.wharton.upenn.edu/issues/2024/8/26/harris-campaign-policy-proposals-2024
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