GOP presidential candidate Donald Trump is making inflation-fighting a key policy plank in his campaign. The problem: Many of his specific policy prescriptions would make inflation worse.

Democratic presidential candidate Kamala Harris wants to fight inflation too, but by targeting a handful of high-profile goods and services. Her plan would do little to slow the overall growth in consumer prices, even if it worked as intended...which history suggests it would not.

Both candidates’ inflation-fighting initiatives are doomed to fail. Unless, of course, inflation simply continues to resolve itself before either of them takes office.

Trump and Harris face a challenge. Voters still see inflation as a major concern even though price pressures have been easing for months. As a result, both candidates want to appear to favor bold steps to fight inflation. But only two fiscal policy levers can moderate demand and broadly slow increases in the price level: Reducing federal spending or raising taxes. And neither candidate has offered plans to do either one.

Trump’s Anti-Inflation Agenda

Trump not only vows to slow inflation but promises to bring down the overall price level. That’s a risky goal since such deflation would likely occur only in a recession.    

More to the point, he’s proposed cutting income taxes, raising tariffs, deporting immigrants, and curbing the independence of the Federal Reserve. Each would worsen inflation.  

Tax Cuts: Trump has promised many tax cuts, including making the 2017 Tax Cuts and Jobs Act (TCJA) permanent, further cutting corporate income tax rates, and repealing federal taxes on tips and Social Security benefits. His running mate, Senator JD Vance, has proposed what sounds like a universal Child Tax Credit.

Because Trump has not specified details of any of these ideas, it is hard to estimate their price tag. But combined, they could cost as much as $6 trillion or $7 trillion over 10 years. Extending the TCJA alone would lower taxes by more than $4 trillion, while repealing the tax on Social Security benefits would reduce taxes by another $1.5 trillion, the Tax Policy Center estimates.

Much of that money would be spent by consumers and businesses, and that added demand likely would raise prices.

Tariffs. Trump’s tariffs would increase consumer prices on imported goods and, perhaps, on domestic products that compete with them. Because they’d raise household taxes by an average of about $1,800, they’d likely slow demand in isolation. But TPC estimates they’d raise about $2.8 trillion over 10 years, a fraction of Trump’s proposed income tax cuts. Thus, Trump would substantially cut taxes overall, likely boosting demand and prices.  

Immigration. Deporting millions of immigrants now living and working in the US and closing the borders to new immigrants as Trump promises, would reduce the supply of workers. That would compel employers to pay higher wages to those still in the labor pool, leading to higher prices and more inflation. The effects of a smaller labor pool might be somewhat offset by shrinking demand for goods and services as the population of immigrant consumers declines.

The Fed. If inflation predictions come to pass, Trump’s agenda would put an enormous burden on the Fed, which would have to raise interest rates to keep prices in check. But both in his first term as president and in the current campaign, Trump has made no secret of his frustration with the Fed’s efforts to control inflation by raising interest rates, a tool that has been extremely successful in the current environment.

Harris And Inflation

For her part, Harris proposed a package of ideas aimed at “bringing down costs for American families.”  But unlike Trump, who focused on the overall price level, Harris targeted housing, health care, the cost of raising young children, and groceries.

These ideas could total as much as $2 trillion in new spending and tax cuts over 10 years, according to the Committee for a Responsible Federal Budget. Harris’s campaign says she’d pay for some of these initiatives by, for example, raising the top corporate income tax rate.   

While her subsidies might reduce the after-tax costs of these goods and services for households that receive benefits, their impact on inflation would be mixed.

Housing. Harris would create new tax incentives for builders to increase supply and, at the same time, offer housing subsidies to first- time homebuyers and renters. Standard economic theory suggests that the net effect on home prices of increasing both supply and demand would be modest at best.

Health care. Accelerating Medicare’s ability to negotiate drug prices likely would lower costs of the targeted drugs for both the federal government and consumers. But will drug makers simply make it up by hiking prices of other pharmaceuticals?

Children: Increasing tax credits for parents may benefit eligible families by increasing their resources to purchase child-related goods and services. But that increased demand would also likely increase prices for those products.  There is no evidence it would lower prices.

Groceries: Harris vows to ban price gouging, though she doesn’t say how. She explicitly targets food and groceries but if her plan limits profits of food companies, they likely would produce less. This shrinking supply would result in higher, not lower, prices.    

Trump calls Harris initiatives Communistic. They are not that. Indeed, the best-known attempt by a modern-era president to manage prices was by Richard Nixon who, more than a half-century ago, imposed temporary wage and price controls.

Nixon surely was no Communist. But his effort was a dismal failure. Perhaps there is a lesson in his experience.