A top economist in the Biden administration says he can’t rule out the possibility of a recession in America’s near future, but he adds that the country is in an economic “position of strength.”
The United States is experiencing a 40-year high rate of inflation coupled with a GDP that shrank 1.4 percent in the first quarter. And some economists have predicted a national recession possibly next year.
But the administration continues to tout rebounds in job growth, unemployment, and reduced deficit spending that have all taken place under President Joe Biden.
“The thing you have to ask yourself, with all of these polling results and all these inflationary pressures of which we are acutely aware, is: ‘Is this country, is this economy, in a position of strength to face what’s coming at us, especially compared to other economies that face the same pressures?’” said Bernstein. “I think the answer, if you look at our job numbers, if you look at our GDP growth, if you look at household incomes and how their savings are doing, you would conclude that we are approaching this moment from a position of strength.”
The Federal Reserve moved forward with its biggest rate hike in 22 years Wednesday, raising interest rates by a half-percentage point to try to rein in inflation that has increased throughout Biden’s time in office.
Meanwhile, Bernstein dismissed criticism that the Biden administration’s record spending is to blame for the heightened inflation.
“I think the international comparisons of where inflation is undermines this point that somehow U.S. spending was responsible for this,” Bernstein said, citing high inflation rates in several other countries.
Bernstein also points to fewer evictions and a reduced rate of child poverty that took place in the wake of the American Rescue Plan—the pandemic relief bill that passed along party lines and cost taxpayers nearly $2 trillion.
When asked whether he could rule out a forthcoming recession, Bernstein responded, “you can never rule anything out, so that’s not really a relevant question.”
While this partial admission of the potential for recession strays from the administration’s messaging, Bernstein’s assertion that America is in a place of strength falls in line with what other administration officials have said in recent weeks.
“So, our economists and our economic team continues to feel confident in the strength of the economy even as we monitor a range of data,” said White House press secretary Jen Psaki on April 29.
Bernstein also repeated the “Putin’s price hike” refrain that the administration has used to point to Russia’s war with Ukraine as a cause of inflation.
