TOP STORIES Despite economists' warnings, Biden says recession is not inevitable

Despite economists’ warnings, Biden says recession is not inevitable


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President Joe Biden speaks during an interview with The Associated Press in the Oval Office of the White House on Thursday, June 16, 2022.

Evan Vucci/AP

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Evan Vucci/AP

President Joe Biden speaks during an interview with The Associated Press in the Oval Office of the White House on Thursday, June 16, 2022.

Evan Vucci/AP

WASHINGTON — President Joe Biden told The Associated Press Thursday that the American people are “very, very depressed” after two tumultuous years with the coronavirus pandemic, economic instability and soaring gas prices hitting household budgets.

He said a recession is not imminent and resented claims by Republican lawmakers that last year’s COVID-19 relief plan was entirely to blame for pushing inflation to a 40-year high, calling the argument “weird.”

Regarding the general mindset of Americans, Biden said, “People are really, really depressed.”

“They’re really down,” he said. “The need for mental health in America skyrocketed because people saw everyone upset. Everything they had hoped for was upset. But basically it’s a consequence of what happened, what happened as a result of the COVID crisis.”

Speaking to the AP in a 30-minute Oval Office interview, Biden addressed economists’ warnings that the United States could face a recession.

“First, it is not inevitable,” he said. “Secondly, we are in a stronger position than any other country in the world to overcome this inflation.”

As for the causes of inflation, Biden has shown some defensive stance on this score. “If this is my fault, then why is inflation higher in any other large industrial country in the world? Are you asking yourself this? I am not a sage,” he said.

The president said he sees reason for optimism with the 3.6% unemployment rate and America’s relative strength in the world.

“Rest assured, because I am confident that we have more opportunities than any other country in the world to own the second quarter of the 21st century,” Biden said. “It’s not hyperbole, it’s a fact.”

Biden’s gloomy assessment of the national spirit is due to the fact that voters are unhappy with his work and the direction of the country. According to a May poll by the Associated Press-NORC Center for Public Research, only 39% of US adults approve of Biden’s performance as president.

Overall, only about 2 in 10 adults said the US is moving in the right direction or that the economy is doing well, compared to about 3 in 10 in April. Those falls were concentrated among Democrats, with only 33% in the Presidential Party saying the country was heading in the right direction, up from 49% in April.

The President spoke about some of the difficult decisions he faced, saying the US must fight back against Russian President Vladimir Putin for invading Ukraine in February, despite the fact that tough sanctions imposed as a result of that war led to a sharp increase in prices for gas, creating a political situation. risk for Biden in an election year. He urged oil companies to think about the short-term needs of the world and increase production.

Asked why he ordered financial sanctions against Moscow that disrupted food and energy markets around the world, Biden said he made his calculations as a commander in chief, not as an election-minded politician.

“I am the President of the United States,” he said. “This is what is best in the country. No kidding. No kidding. So what will happen? What happens if the strongest force in NATO, the organizational structure that we have created, leaves Russian aggression?”

Biden pointed to the possibility of chaos in Europe if Russia continues to move unhindered deep into the continent, China dares to seize Taiwan, and North Korea becomes even more aggressive with its nuclear ambitions.

Biden reiterated his contention that the big oil companies benefited from higher prices by not increasing production as much as they should have. He said companies should think about the world in the short term, not just about their investors.

“Don’t reward yourself,” he said.

Consumer prices have jumped 8.6% over the past year, the sharpest rise in more than 40 years. Republican lawmakers said last year’s $1.9 trillion coronavirus relief package for Biden set off a price spiral.

The president said there was “zero evidence” for that claim, noting that other countries experienced higher prices as economies reopened and people began to get vaccinated. Nevertheless, Biden acknowledged Treasury Secretary Janet Yellen’s contention that the spending had a limited inflationary effect.

“It’s debatable whether this had a negligible effect on inflation,” he said. “I do not think so. And most economists don’t think so. But the idea that this caused inflation seems strange.”

Nevertheless, high inflation has stymied Biden. He prioritized restoring millions of jobs, and the unemployment rate has returned to near pre-pandemic levels. The Federal Reserve raised its key interest rate on Wednesday in hopes of slowing the economy and lowering inflation to its 2% target.

The tightening of the Fed’s policy caused a decline in financial markets and led many economists to warn of a potential recession next year. The President urged Americans to be patient.

“They should not believe the warnings,” he said. “They should just say, ‘Let’s see what’s right.’

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