By Austin Packham 
Photo Credit: AP News
Inflation is one of the most pressing concerns on Americans’ minds heading into this election. Inflation has raised the prices of everyday essential goods and services, increasing overall costs, like owning a home and supporting a family. Americans reliant on credit cards now face a total amount of debt cumulatively surpassing a trillion dollars. As the 2024 presidential election reaches its conclusion, both former President Donald Trump and Vice President Kamala Harris proposed competing economic policies aimed at helping alleviate these increased financial burdens.
Vice President Kamala Harris’s Proposal
Presidential candidate Kamala Harris has concentrated on calling out grocery store companies, stating they have taken advantage of Americans who have seen a dramatic increase in their daily bills. She then proposed a first-of-its-kind national ban on corporate “bad actors” who engage in price gouging on food and other grocery store items during economic crises.
Economists explain price gouging as rising demand, during times of emergency, for essential goods like groceries, gas, and cleaning essentials due to an increased need for particular products, increased bulk buying, and increases in expected scarcity. This leads consumers to rational “stocking up” or “panic buying.” Firms respond to these increases in demand through price changes, often in the form of “short-term price hikes.” These substantial price increases allow grocery store corporations to gain increasingly significant profit margins by engaging in the practice often called “price gouging” or “profiteering.” Harris discussed how the legislation would work, stating that a federal ban would be applied to short-term, rapid price gouging on “Essential goods during emergencies or times of crises,” which is often when Americans need these products the most.
Vice President Kamala Harris does believe there is a pathway to implementing this federal ban promoting anti-price gouging practices from grocery stores nationwide. The primary evidence for this is that varying degrees of anti-price gouging statutes have already been written into the laws of 34 states. The presence of these policies at the state level allows Harris’s proposed policy to be more of a reinforcement of existing state statutes. The aim is to provide increased price-gouging protection to the states with weaker price-gouging laws and the 16 states without such statutes. Harris believes her federal ban would work alongside established state statutes and build on their impact.
Former President Donald Trump’s Proposal
Presidential candidate Donald Trump has focused on credit card companies and the interest rates they charge credit card users. The former President aims to address these higher interest rates by proposing a short-term cap on credit card interest rates, currently between 22-23%, to a more manageable figure of around 10%. The basis for this policy proposal comes from the rising costs associated with inflation, leading to more Americans borrowing money using credit cards to cover the cost of higher-priced goods.
Using credit cards to pay for essential goods like grocery bills and house/car payments disproportionately leverages debt against middle and lower-income communities, which cannot immediately pay off this accrued debt. Data from the Federal Reserve Bank of St. Louis shows that while overall America’s credit card debt is concentrated in the median (middle-class) deciles, the debt-to-income ratio is significantly higher (over 80%) for the lowest-income decile of Americans. By reducing the financial burdens of borrowing money through credit, former President Trump’s proposed policy to cap these premium interest costs to 10% aims to provide relief to the lowest-income earners, who are weighted down the most by credit card debt.
For Trump, the possibility of passing a federal policy with this effect lies in the proposal’s “temporary” nature, limiting its scope during normal economic conditions. Instead, much like Harris’s proposal, it is only designed to relieve current financial pressures that make it harder for people to pay off debt with interest at its current rates. Trump spokesperson Karoline Leavitt discussed the increasing struggle many Americans face to pay back current interest payments while facing “skyrocketing costs of mortgages, rent, grocery, and gas.” Trump believes that lowering interest rates on credit cards during times of financial turmoil will ultimately help Americans “catch up” by saving them money and increasing their ability to pay for essential goods.
Difficulties in Passing Each Policy
Both sides of the aisle have raised questions about the feasibility of implementing any nationwide regulation that is this ambitious and grand in scale. Democratic lawmakers have anonymously gone on record to say this specific part of the Harris economic plan is “not viable” to pass in Congress. The increasing partisan divide in Congress preventing the Harris plan from passing, is also hurting the chances of Trump’s proposal from passing in the same way. Jaret Seiberg, a managing director at a Washington research group, spoke on how passing this legislation in Congress is a “low-probability event.”