In a recent CNBC interview with Scott Wapner, Goldman Sachs' CEO David Solomon set the record straight after Vice President Kamala Harris referenced the bank's analysis during a heated presidential debate. Harris had pointed to the Wall Street giant's forecasts as proof that her economic plan would outshine Donald Trump's.
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“Goldman Sachs compared my plan with his and said my plan would grow the economy. His would shrink the economy,” Harris claimed during an MSNBC solo interview with Stephanie Ruhle. She positioned her policies as part of an "opportunity economy," contrasting them with Trump's tax cuts, which she argued mainly benefit the wealthy.
But Solomon quickly clarified that Harris had gotten it wrong. He explained that the Goldman Sachs report had been misrepresented. Solomon says the bank's analysis didn't paint a stark picture between the two candidates' plans.
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“So, that report, which was mentioned last night in the debate, came from an independent analyst and it's interesting, Scott,” Solomon began. “I think a lot more has been made of this than should be.”
The Goldman Sachs report examined several policies from both sides, attempting to model how each would influence GDP growth. Solomon stressed that the findings were limited in scope and carried significant uncertainty.
“The reason I say a bigger deal has been made of it is what it showed is the difference between the sets of policies they've put forward is about two-tenths of one percent,” Solomon explained.
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However, the report wasn't completely without insights that leaned in Harris' favor. While subtle, there were some notable benefits to her proposals. The analysis showed that her victory could lead to more job creation—about 10,000 more jobs per month compared to Trump's policies under a divided government.
That number jumped to 30,000 more jobs if Trump won and maintained control of the Senate and House. Though the gap might not be massive, it was enough to suggest that Harris’ plan had a slight edge in terms of employment growth.
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The report also discussed Harris' tax policy. She has proposed raising taxes on individuals earning over $400,000 and corporations while offering tax cuts to the middle class. The report noted that higher corporate taxes might lead to reduced investment.
Still, the analysts predicted that her increased spending plans and expanded middle-income tax credits would balance things out. The bottom line is a very slight boost to GDP growth between 2025 and 2026.
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On the other hand, Trump's economic strategy remained vague, as he hadn't released a detailed plan at the time of the report. However, his intentions to raise tariffs, particularly a 10% baseline on all imports and 60% on Chinese goods, didn't get a favorable nod from economists.
According to the Goldman analysis, these tariffs could increase inflation, especially with higher car prices from China, Mexico, and the European Union. The report suggested that Trump's tariffs could do more harm than good regarding core inflation, potentially putting more pressure on consumers.
Additionally, according to the bank’s findings, Trump's economic measures, including extending his 2017 tax cuts, wouldn't significantly stimulate the economy. While Harris’ plan wasn't without its trade-offs, the Goldman Sachs analysis suggested that she held a slight edge regarding jobs and long-term economic growth.
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