Ian Bremmer, president and founder of political risk consultancy Eurasia Group, warns that the coronavirus economic fallout is pushing the U.S. into a depression.
“President Reagan said a recession is when your neighbor loses his job, and a depression is when you lose yours,” Bremmer told the Gallup Podcast.
Bremmer said that while a depression doesn’t have a technical definition the way a recession does, it is an “open question” if the economy is headed into such a downturn. A recession has been typically recognized as two consecutive quarters of economic decline, as reflected by GDP in conjunction with monthly indicators such as a rise in unemployment. A depression is commonly thought of as a more severe decline that lasts for several years.
Bremmer used his own parameters to gauge the current condition of the economy amid the seemingly endless coronavirus pandemic.
“A depression is widely understood as something that is truly global, it has real duration and it has a much greater impact economically on people’s lives than recession,” he said, adding there “is without any question” that the current environment meets all three of those requirements.
“I would call it very clearly a depression,” he said.
He said global governments have “to do a lot more than they are so far expected” to fight soaring inflation, which he predicts will be in the “double-digit, low-teens” in America.
The lingering economic fallout from the coronavirus crisis also will continue to have a “massive impact on consumer behavior, and massive impact on the ability of companies to stay afloat, stay solvent,” he warned.
“You’re not coming back to the way of life we had before coronavirus, economically, until you have a vaccine,” Bremmer said, speculating that would take a minimum of three years.
Despite such a dire forecast, Bremmer said there is one saving grace: The world is a lot wealthier now than back in the time of the Great Depression.
“Even though the contraction is massive, and worse than anything that any of us living have experienced, the world is much better positioned to be able to tolerate that kind of contraction now than it was at the beginning of the 20th century,” he said.
However, not everyone is as pessimistic about the U.S. economic future.
White House trade adviser Peter Navarro recently slammed mainstream media reports about the nation's record job losses from the coronavirus pandemic as a "pity party" and insisted that the current economic crisis is "not the Great Depression."
"Anybody who thinks this is the Great Depression doesn't understand either history or economics," Navarro said on Fox News' "Fox and Friends." "The Great Depression pity party stuff I saw ... this ain't fact," he said.
"The Great Depression was a 10-year process that came out of the end of World War I, went through inflation, and then a deflation cycle, accompanied by catastrophic applications of currency trade, fiscal and monetary policy and it lasted a very, very long time," said Navarro.
"President Donald Trump built up the strongest most beautiful economy in 3.5 years before the Chinese Communist Party dropped the virus on the world and in 60 days temporarily shut us down. What we all need to do here is focus on the mission, the original mission."
Meanwhile, coronavirus task-force economic adviser Stephen Moore told Newsmax TV that amid the economic crisis caused by the coronavirus pandemic, a vote for Joe Biden is a vote for another Great Depression.
"I'm going to not sugarcoat this: If Joe Biden were elected president in the midst of this economic crisis, we would have a Great Depression," Moore recently told "Saturday Report." "There is no doubt in my mind. It would live five or six years. The would raise taxes to 50 or 60%."
Moore was responding to Biden campaign statements he would be the better president to get the U.S. out of its coronavirus economic woes.
"Wow, talk about leading with your chin," Moore added to host Grant Stichfield. "The last thing Joe Biden wants to talk about is the Trump economy the last three years."
"We about about the most beautiful picture you could have possibly imagined" before the coronavirus pandemic.
"So, Joe Biden must be living in some king of La La Land," Moore said, calling the House Speaker Nancy Pelosi's, $3 trillion coronavirus bailout "a preview of coming attractions."
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