As a growing group of economists and industry executives warns of the threat of a recession in the near future, the Biden White House is working diligently to avoid that possibility — by redefining the word “recession” altogether.
Typically, a recession is defined as six straight months — or two consecutive quarters — in which a country’s gross domestic product (GDP) decreases. During the first quarter of 2022 the United States’ GDP shrunk by 1.6%, meaning if the economy experiences another period of economic downturn in the second quarter, the country is in a recession.
That crucial second quarter data is set to be released this Thursday. And while some experts anticipate a modest bounce-back when the new report is released, others are far less optimistic. The Federal Reserve Bank of Atlanta’s GDPNow model, for example, currently predicts GDP to have shrunk by another 1.6%.
If that’s the case, the country will be — quite literally — in a recession.
However, some at the Biden White House don’t quite buy the decades of established economic theory, and have decided to establish their own more convenient, “holistic” definition of a recession.
“What is a recession?” a handout from the Council of Economic Advisers began. “While some maintain that two consecutive quarters of falling real GDP constitute a recession, that is neither the official definition nor the way economists evaluate the state of the business cycle. Instead, both official determinations of recessions and economists’ assessment of economic activity are based on a holistic look at the data.”
“Based on these data, it is unlikely that the decline in GDP in the first quarter of this year — even if followed by another GDP decline in the second quarter — indicates a recession,” the handout went on to claim.
In other words: even if the economic data indicates we are in a literal recession, it won’t be an “officially determined” one until the Biden administration says so. And if that’s not enough lunacy to completely discredit the White House, consider their cheery, ridiculously out-of-touch view on the state of the economy.
“Trends in the data through the first half of this year used to determine a recession are not indicating a downturn,” the handout claimed. And in fact, “[t]here is a good chance that the strength of the labor market and of consumer balance sheets help the economy transition from the rapid growth of last year to steadier and more stable growth.”