Silver State Times

The White House is refusing to utter the words recession despite the second consecutive quarter of negative economic growth for gross domestic product (GDP) figures.

Many economists have linked high inflation to government spending over the past few years and with more government spending being proposed, economists are concerned that it will accelerate the country’s economic troubles. 

After declining at an annual rate of 1.6% in the first quarter of 2022, GDP dropped another 0.9% in the last three months, according to the Bureau of Economic Analysis' (BEA) latest release for quarter two. The decline means the economy is shrinking. 

The White House has pushed back against calling the current state of the economy a recession, citing the importance of the country's job growth. In a recent press briefing, White House press secretary Karine Jean-Pierre can be heard saying "we are not currently in a recession or a pre-recession." 

Treasury Secretary Janet Yellen also noted in a recent appearance on NBC's Meet the Press, "When you're creating almost 400,000 jobs a month, that is not a recession." 

Last week, U.S. Democratic Sen. Joe Manchin (D-WV) announced he has reached a deal with Senate Democratic leader Chuck Schumer on a bill that includes $430 billion in new spending on energy, electric vehicle credits and health insurance, according to Reuters. 

Additional proposed spending comes from the Senate who just passed a bill known as the CHIPS-plus or Chips and Science Act, which includes more than $52 billion for U.S. companies producing computer chips. The legislation was also recently passed by the House, meaning President Biden is the next to sign it into law. 

"Thrilled to see the CHIPS and Science Act I helped pass head to the president’s desk to become law. This bill will create good-paying jobs for Nevadans, bolster our manufacturing industry, and strengthen supply chains. It’s an investment in American workers and American products," Sen. Catherine Cortez Masto (D-NV), a major supporter of the microchip manufacturing bill, which proposes over $50 billion in spending, said on Twitter. 

Paige Terryberry, senior analyst for fiscal policy with the John Locke Foundation, confirms the current bout of inflation stems from the massive injection of cash since the pandemic’s onset. 

In mid-2021, President Biden proposed a $6 trillion budget for fiscal year 2022, which the New York Times says "would take the United States to its highest sustained levels of federal spending since World War II." The proposal included large new investments in education, transportation, and fighting climate change. 

In April, the Washington Post reported the Biden administration launched a $6 billion program which would bail out operators of nuclear power plants in economic distress. The Energy Department said the spending was part of the administration's strategy to fight climate change, 

As NPR noted, two consecutive quarters of negative economic growth is often considered a recession, is it not an official definition. Rather, a group of economists from the National Bureau of Economic Research (NBER), a nonprofit and non-partisan organization, officially determine when the U.S. economy is in a recession.