Goldman Sachs Says Harris, Democrats Better For Economy Than Trump

By Dave Goldiner
New York Daily News
(TNS)

Wall Street giant Goldman Sachs says a win for Kamala Harris and Democrats in November would be better for your pocketbook than if former President Trump succeeds in getting back to the White House.

A report from the investment bank suggests Harris’ plan to assist middle class Americans and small business would increase consumer spending and create tens of thousands of jobs every month.

The boost would narrowly outweigh any negative impact of possible higher taxes Democrats might implement for the wealthy and big business, especially if they control Congress and block extending Trump’s giant 2017 tax cut.

“If Democrats sweep, new spending and expanded middle-income tax credits would slightly more than offset lower investment due to high corporate tax rates, resulting in a very slight boost to [gross domestic product] growth,” Goldman wrote in the note to investors.

The Goldman report came as Harris headed to New Hampshire Wednesday to unveil a new economic plan to boost small businesses.

The vice president wants to expand from $5,000 to $50,000 tax incentives for small business startup expenses, with the goal of eventually spurring 25 million new small business applications over four years.

On the other hand, the report predicts Trump’s economic policies would hurt the economy, especially his signature proposal for much higher tariffs on imported goods.

“We estimate that if Trump wins in a sweep or with divided government, the hit to growth from tariffs and tighter immigration policy would outweigh the positive fiscal impulse,” Goldman analysts wrote.

The Trump tariffs would effectively amount to an inflationary jolt to consumers’ bottom line, and could help spur an economic slowdown. It would likely cost the gross domestic product about 0.5% in growth, a negative headwind that would persist throughout 2025.

Under a president Harris, job growth would be 10,000 a month higher than if Trump wins with a divided government and 30,000 higher if the GOP controls the White House and both chambers of Congress, according to Goldman.

The Wall Street firm’s assessment could come as a surprise to voters, who generally give Trump and the Republicans an edge when it comes to handling the economy and inflation.

A recent Reuters/Ipsos poll said 43% of voters trust Trump more on the economy compared to 40% for Harris. That edge is significantly narrower than the lead Trump enjoyed over President Biden, whom many voters blamed for historically high inflation on his watch.

Goldman also says Trump’s hardline proposals on immigration and the southern border could have a dramatic negative impact on the economy, while it predicts the more flexible approach from Democrats would be a net positive.

Economic studies generally say immigration is a key driver of American economic growth.

Immigrants tend to be younger and likely to spend more of their paychecks than native-born Americans, boosting both the labor market and spending.

Goldman says any crackdown on undocumented migrants could damage the nation’s bottom line by reducing those engines of growth.

_______