US Secretary of Treasury Scott Bessent and Howard Lutnick stand with President Donald Trump in the Oval Office of the White House on February 3 in Washington, DC. – Anna Moneymaker/Getty Images
A story in CNN’s What Matters newsletter discussed concerns about a possible recession. The Trump administration is suggesting that Americans may face challenges as a result of economic policies. Despite shaky job growth and declining consumer confidence, economists are divided on the likelihood of a recession. Treasury Secretary Bessent believes the economy needs to kick an addiction to government spending. Trump and his advisers are committed to tariffs and a nationalist approach, even if it could lead to a downturn.
While some anticipate potential economic hardships, others believe the benefits of a more self-reliant economy outweigh the risks. The administration’s readiness to accept the possibility of a recession could have political implications, as previous recessions have influenced election outcomes. The current era of political turmoil in the US adds another layer of uncertainty.
It is important to note that while a recession is not desirable, acknowledging its potential impact demonstrates ownership and accountability. Each recession in recent history has been linked to specific events, highlighting the complex interplay between economic, political, and social factors.
Higher unemployment and the economic hardships caused by a recession would negatively impact most Americans. Historical data demonstrates that voters tend to hold presidents accountable for downturns in the economy. For instance, the 1990 recession, triggered by the savings and loan crisis, likely contributed to President George H.W. Bush’s loss to Bill Clinton in 1992. Similarly, the 1980 recession played a role in President Jimmy Carter’s failed reelection bid.
Notable figures, such as Rahm Emanuel and Mark Zandi, have expressed concerns about the current economic policies potentially pushing the country towards a recession. While economists suggest that the likelihood of a recession is still relatively low, there are growing concerns, with some warning of the possibility of stagflation—a combination of economic stagnation and inflation.
Larry Summers and Federal Reserve Chairman Jerome Powell have also raised alarms about the economic direction, emphasizing the need for moderation in policies to avoid a more severe downturn. Despite these concerns, it’s essential to note that worries about a recession don’t always translate into an actual recession.
