There was a 50% drop in the stock market, massive inflation, and skyrocketing unemployment. All of this following a major pandemic that killed hundreds of thousands of Americans, sharp interest rate hikes from the Federal Reserve, relatively enormous expenditures at the federal level, and quickly increasing prices from an economy that was already inflationary.
Sound familiar?
Yet we don't hear about it, because by the next year the economy fully recovered. And it didn't just recover, it exploded — ever hear of the "Roaring Twenties"?
Even the people who experienced it didn't think much of it afterwards, hence its name.
So how was it possible? Well, the government did the one thing governments worldwide and throughout time just cannot seem to do: back off.
They didn't try to keep prices from falling through worthless "price gouging" laws. They didn't try to "fight" inflation with more government regulations.
They cut taxes, balanced the budget, and for the most part left the market alone.
So President Biden is 100% correct. A recession isn't inevitable. It could be avoided. But it won't be, because there's no way he, Congress, or the numerous alphabet federal agencies will give up the power they'd need to give in order for this not to become an utter mess.
People want to blame Democrats but Trump was president in 2020 and oversaw more spending and currency printing (and if I remember right, Republican-dominated Congresses tend to spend more than Democratic-controlled ones, ironically enough).
Democrats are still primarily to blame since they’re the ones in power and could enact the simple solutions mentioned, but they never will. But I don’t think Republicans would do much better either.
And the Federal Reserve operates the same irrespective of the party in power.