Trump warns something worse than recession is coming
Former President Donald Trump has warned that the US economy is on course for a bigger disaster than a recession, his remarks coming shortly before government statistics showed GDP to be negative for the second quarter consecutive, which is an empirical definition of a recession. .
“Where we’re going now could be a very bad place,” Trump said at a rally in Arizona last week. “We have to get this law in order, we have to move this country forward, or we’re going to have a serious problem.”
The former president pointed to collapsing real wages for Americans, a historically depressed labor force participation rate and pressure from Democrats for the Green New Deal that he said would crush economic growth.
“No recession. Recession is a nice word. We are going to have a much bigger problem than the recession. We will have a depression,” the former president said.
Trump’s remarks came days before the Bureau of Economic Analysis (BEA) released data showing U.S. real GDP fell 0.9% annualized in the second quarter after contracting 1. 6% in the first quarter.
Two consecutive quarters of negative GDP growth is a common empirical definition of a recession, although recessions in the United States are officially declared by a committee of economists from the National Bureau of Economic Research (NBER) using a broader definition than the rule of two quarters.
Vance Ginn, chief economist at the Texas Public Policy Foundation, told The Epoch Times’ sister outlet NTD in an interview that while officially it’s the NBER who calls recessions the two-quarters rule. is’ usually how it’s done by a rule of thumb. ”
“I think it’s definitely a recession that we’re in now because of these bad policies,” Ginn added, blaming a series of “progressive policies” emanating from the White House and the Democratic-controlled House.
Stagflationary winds are blowing
In his remarks, Trump also took aim at President Joe Biden’s handling of the economy, blaming him for soaring inflation.
“Biden has created the worst inflation in 47 years. We’re at 9.1%, but the actual number is much, much higher than that,” Trump said.
Although the former president did not provide his own estimate of the true rate of inflation, another CPI inflation gauge developed by economist John Williams, calculated using the same methodology used by the US government in the 1980s, puts the figure at 17.3%. , a 75-year high.
Trump also said persistently high inflation combined with an economic slowdown has put the country “on the brink of a devastating period” of stagflation, which is a combination of accelerating prices and slowing economic growth.
Inflation is “going higher and higher all the time,” Trump said, adding that it “costs families nearly $6,000 a year, more than any tax hike ever proposed other than the tax hike.” tax they want to propose right now”.
During Trump’s first full month in office in February 2017, the headline consumer price index (CPI) inflation gauge stood at 2.8% in annual terms. While the CPI measure fluctuated during his tenure, the highest ever was 2.9% in July 2018, while during his last month in office, January 2021, inflation rose. reached 1.4%.
Under Biden, inflation has risen steadily, climbing 9.1% year-over-year in June 2022, a figure not seen in more than 40 years.
“War on American Energy”
Soaring energy prices were a major contributing factor to inflation, accounting for about half of the headline inflation figure, according to the Bureau of Labor Statistics.
In his critique of Biden’s policies, Trump pointed to what he called “Biden’s war on American energy” and blamed him for driving up gas prices.
Since taking office, Biden has taken a number of executive actions targeting the oil industry, including rescinding the Keystone XL pipeline permit, halting new oil and gas drilling leases on federal lands and waters. and the end of fossil fuel subsidies by some agencies.
Gasoline prices are about double what they were when Biden took office, with the president blaming a variety of factors including a lack of refining capacity, the war in Ukraine and corporate greed.
In a bid to lower prices at the pump, Biden ordered the release of oil reserves from the National Strategic Reserve, called on US refineries to increase production and pushed OPEC to pump more crude.
In his speech, Trump said it amounted to “begging” other countries to pump in more oil instead of trying to increase domestic production.
“We have more liquid gold under our feet than any other country in the world. We are a nation that is consumed by the radical left’s Green New Deal, but everyone knows that the Green New Deal will lead to our destruction.
“Just two years ago, we were energy independent. We were even energetically dominant. The United States is now a beggar of energy.