All of a sudden, there’s a great deal of fear about a recession.
The stock market is tumbling amid uncertainty about President Trump’s tariff threats, and numerous other economic indicators aren’t quite positive, either.
Trump has sought to dismiss the economic factors as transitional while saying this week that “we’re going to have disruption, but we’re OK with that.”
Meanwhile, the Secretary of Commerce, Howard Lutnick, said this week that Trump’s policies are “worth it,” even if there is a recession, while he also blamed “the Biden nonsense that we had to live with” for the possibility of a recession.
This came after an election season in which Trump frequently promised unlimited prosperity- and swept into office on anger over still-high consumer prices. Eggs, after all, remain stubbornly expensive.
If there is indeed a recession, Trump may find himself in a bad spot- because there are reasons to think the primary recession-fighting tools of the past won’t work this time.
A Short History of Rescue Packages
The last few times there’s been a recession, or something close to one, the government has always done the same thing: Passed a massive spending or “stimulus” package.
Following the financial crisis in 2008, which led to what’s known as the Great Recession, President Barack Obama signed the American Recovery and Reinvestment Act (ARRA), a $787 billion stimulus package.
During the COVID-19 lockdowns in 2020, which took place during Trump’s first presidency, Trump signed the $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act (known as the CARES Act), which provided COVID relief as well as economic stimulus. Trump would sign a second, smaller COVID relief package that December, in the lame duck period.
While the COVID downturn didn’t last long enough to officially be considered a recession, it led to another big spending package in 2021 after President Joseph Biden took office. This was the American Rescue Plan Act, which cost $1.9 trillion, and like the CARES Act, included direct stimulus checks for nearly all Americans.
Those measures, combined, succeeded at bringing the U.S. economy back from the brink, although the massive amount of new money it added to the economy appears to have led to the inflation that remains a problem all these years later.
Recession 2025?
That brings us to today. Should there be a recession that goes into effect before the end of 2025, the Trump Administration might have trouble solving it the way the last few presidents have.
For one thing, there isn’t one big problem that a massive legislative package would be designed to solve, whether it’s the collapsed housing market of 2008 or the need for pandemic relief in 2020.
No one is talking about this yet. But if Trump, dealing with a recession later this year, were to try to pass a massive spending package to stimulate the economy, he would likely run into resistance from Republican fiscal hawks in Congress who are ideologically opposed to bigger deficits- to the point where they’re having trouble agreeing among themselves to pass an omnibus spending bill. When the CARES Act was passed in 2020, Democrats had control of Congress.
Also, interest rates are higher than they were then, as are the deficit and the national debt.
Donald Trump’s Options
According to a CNN analysis published this week, “It’ll be tough for Trump to dig his way out of this one.”
Per the analysis, Trump’s advisers have called his tariff strategy “fluid,” and Trump has already changed his mind on tariff levies multiple times.
There’s also the possibility that the tariff situation could “shock the economy so severely that it would finally kill America’s inflation problem.” But that would likely be sort of like the record-low gas prices during the summer of 2020- a result that came from a great deal of pain beforehand.
Donald Trump image by Gage Skidmore.
About the Author: Stephen Silver
Stephen Silver is an award-winning journalist, essayist and film critic, and contributor to the Philadelphia Inquirer, the Jewish Telegraphic Agency, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. For over a decade, Stephen has authored thousands of articles that focus on politics, technology, and the economy. Follow him on X (formerly Twitter) at @StephenSilver, and subscribe to his Substack newsletter.
