The Economic Stakes in the 2020 Election



I continually try to clarify this blog’s point of view. I am a (mostly) non-ideological fiscal conservative and social moderate. One of the great strengths of our democracy is the constant competition between the two main parties. If one party gains too much influence, then the other party will make a comeback in the next election.

I have stated in recent posts that I like Donald Trump’s emphasis on populism and nationalism, and that progressive policies are often ineffective. 

   

Today let’s look at the economic policies proposed by the two presidential candidates. First of all, the Committee for a Responsible Federal Budget takes a dim view of both platforms. It projects a national debt under the Biden plan of 128% of GDP in 2030 as compared with a debt of 125% of GDP in 2030 under the Trump plan. These are both huge increases from the current level of about 100% of GDP today. While much different from each other, their platforms are quite similar in terms of new debt incurred.

   

Now let’s turn to the economic effects of their policies, a more complicated subject. Here is one analysis by Casey Mulligan from the University of Chicago, “The Real Cost of Biden’s Plans.” 

• New regulations implied by Biden’s plans will cost the lowest income quintile of Americans 15.3% of its total income.

• A ban on fracking, required to meet his goal of 100% clean energy by 2035, will alone cost the lowest income quintile 6.8% of annual income.

Conclusion. Many things are at stake in the 2020 presidential election, but economic effects are among the most important. In this regard, there is a clear difference overall between the two candidates.

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