President Joe Biden addressed warnings from economists that the US could soon enter recession by saying it is “not inevitable”.
He made the comment during a 30-minute Oval Office interview with The Associated Press. Among other things, he talked about the scars left by the covid-19 pandemic, and the “battered economy” he inherited as president.
“People are really, really down,” he said. And yet he was optimistic on at least one point: the possibility of a recession hitting the US economy.
Besides the literal meaning of the phrase “not inevitable”, which Biden used to refer to an imminent recession, what do his remarks suggest?
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President Joe Biden says Americans shouldn’t believe economists’ warnings
“First of all,” president Biden told The Associated Press today, “it’s not inevitable.” He was talking about the possibility of fighting inflation causing the US economy to “tip” into recession.
AP interviewer Josh Boak told him about the gloomy forecasts of “serious economists”, who warn of a recession as soon as “next year”.
But Americans, Biden replied, “shouldn’t believe a warning”. Instead, they should “just say: ‘Let’s see. Let’s see, which is correct.’”
“Secondly, we’re in a stronger position than any nation in the world to overcome this inflation.”
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‘Not inevitable’ meaning explained as Biden appears optimistic about US economy
If something is inevitable, it is certain to happen – it is unavoidable. Being “not inevitable”, therefore, means the opposite.
For some, the double negative in the phrase “not inevitable” might muddy its meaning. But, essentially, what Biden meant by saying a recession was “not inevitable” was that it is avoidable.
Biden says the US is well placed to avoid a recession.
“We’ve reduced the deficit,” he continued. “We’ve increased employment, increased pay. There was a survey done […] about three months ago. You had more people had lower debt, […] more savings in their savings account, higher pay in the job they had, more satisfaction in the job they had and they were in good shape financially.”
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Why is Biden so confident about inflation and the chances of a recession?
During the interview, Biden rebutted claims he caused inflation. He did so by pointing to other developed nations that are suffering similarly bleak economic headwinds.
“If it’s my fault,” he said, “why is it the case in every other major industrial country in the world that inflation is higher?”
When asked what he, as president, can do to address the “profound psychological trauma” caused by the covid-19 pandemic, Biden said: “Be confident. Be confident because I am confident.”
Among the policies he talked about implementing – to bolster the US economy – were tax incentives for winterisation, federal acquisition of semiconductors, and tax increases on the “super wealthy”.
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Interest rate hikes raise risk of recession to 72%, Bloomberg Economics estimates
According to Bloomberg Economics’ latest analysis, the likelihood of the US facing a recession by 2024 is currently 72%.
“It may take a recession to stamp out inflation,” the outlet claims. “And it’s likely to happen on President Joe Biden’s watch.”
The chances of a recession have risen steadily since February 2022. On Wednesday this week, the Federal Reserve raised its benchmark interest rates by 0.75% to counter inflation.
CNBC called it the Fed’s “most aggressive hike since 1994”.
“When central bankers try this hard to slow the economy down,” Bloomberg wrote, “they often end up tipping it into outright reverse.”