Opportunity Economy Framework: Harris's Economic Policies and Their Potential Impact on the Crypto Market

This week, the market has entered a calm period ahead of the Jackson Hole meeting, with attention on Powell's interpretation of the latest employment and inflation data, as well as guidance on future monetary policy. This will become an important reference for the September interest rate decision.

It is worth noting that a Democratic presidential candidate recently unveiled the first clear economic policy framework - "opportunity economy". This far-left economic proposal aims to reduce the living costs of the American people through government policies in four areas: housing, healthcare, food essentials, and childcare. If implemented, it could drive the crypto market to replicate the upward trend of 2021, but it may also trigger a resurgence of inflation in the United States.

1.7 trillion subsidy program

With the candidate officially nominated and supported by various parties, their momentum has significantly increased. Polling data at one point surpassed Trump, demonstrating strong competitiveness. Although the polling results may be subjective, they also reflect the formidable strength of their campaign team.

The candidate has previously been questioned due to a lack of clear economic policy preferences. The "Agenda to Reduce Costs for American Families" released on August 16 surprised many and sparked considerable controversy. This framework, referred to as the "opportunity economy," aims to stimulate overall economic vitality by reducing household costs and creating more employment and entrepreneurial opportunities for the middle class.

The plan proposes specific measures in four areas: housing, healthcare, food and daily necessities, and childcare.

1. Housing: Plan to build 3 million new housing units; crack down on misconduct by companies and large landlords; provide down payment subsidies for first-time homebuyers.

2. Healthcare: Limit drug costs; accelerate health insurance negotiations; enhance industry competition and transparency.

3. In terms of food and daily necessities: prohibit price fraud; establish rules to limit excessive profits of large companies; empower regulatory agencies with more authority.

4. Parenting: Provide tax credits for families with children; support dual-income families; reduce the burden of health insurance.

These proposals promise to be implemented within the first 100 days of taking office. However, the plan also faces numerous doubts, primarily focused on housing and food daily necessities policies, as well as the overall budget. Opponents argue that radical housing policies could exacerbate the debt crisis, while food daily necessities policies could violate market rules, triggering a new round of inflation.

Non-profit organizations estimate that the program could increase the government deficit by $1.7 trillion to $2 trillion over the next decade. This could exacerbate the debt crisis, drive up inflation, and intensify social conflicts due to adjustments in the tax structure.

Potential Impact on the Crypto Market

The bill primarily benefits the American middle class. Although there is diminishing effectiveness of government policies on economic intervention, it may still have a significant impact in the short term. If the plan is implemented, the cost of living for American middle-class families may decrease, and disposable income may increase. This creates conditions for the rise of risk assets, especially technology assets with high EPS.

This situation is similar to the $1.9 trillion COVID-19 relief bill implemented by the Biden administration in early 2021. At that time, disposable income for American households surged, leading to a significant rise in the crypto market, represented by Bitcoin. However, the subsequent inflationary pressures forced the Federal Reserve to engage in prolonged monetary tightening, resulting in a sharp correction of risk assets.

Therefore, if economic policies of a similar scale are implemented, it may be beneficial for crypto assets in the short term, but in the medium to long term, one must be wary of the inflationary return and the corresponding monetary policy risks that may arise. Of course, all of this also depends on whether the candidate can be successfully elected and effectively implement the policies.