New Hampshire Gov. Chris Sununu warned that inflation is going to be “very exacerbated for the next few years” and a recession will be “very real” owing to the fact that much of the spending allocated under the American Rescue Plan and infrastructure package hasn’t actually been spent yet.
Sununu, a Republican, made the comments in an interview on “CNN Tonight” on Wednesday, when he warned that a severe recession was likely and that the country “hasn’t even begun to feel the beginning of it.”
“So, look, everyone talks about the $5 trillion into the economy that has driven inflation, that’s absolutely true, there’s no doubt,” Sununu said, referencing just some of the billions of dollars in pandemic stimulus money.
“What a lot of people don’t realize, I think governors and a few of us who are actually in charge of allocating those dollars and spending them, only a fraction has actually been spent. It’s all been allocated. But the actual number of checks that have been cut is very minimal,” the governor said.
“ARPA [American Rescue Plan Act] funds—all of this—that’s all designed—infrastructure, all designed to be spent into 2024, 2025, and 2026. And so, inflation is going to be very exacerbated for the next few years, and the recession is going to be very real.”
Biden Acknowledges Chance of ‘Slight Recession’
Sununu’s comments come as inflation still hasn’t shifted from a 40-year high, leaving households across the country struggling to pay for food or fill up their vehicles with gasoline. Experts have warned that a hard recession is just months away.
The GOP governor warned that a severe recession was likely on the horizon, while urging Americans to vote for Republicans in the upcoming midterm elections.
“Never in American history, in world history, do you get inflation like this not followed by a pretty severe recession,” Sununu said. “And so that’s why you’re going to need Republicans, fiscal hawks, folks that are managers, willing to make tough decisions, to make sure that it isn’t government that comes first, it’s individuals, and that kind of opportunity at a real community level.”
The Biden administration has for months insisted that the U.S. economy will not tip into a recession, and the Federal Reserve is still aiming for a “soft,” albeit challenging, landing, although an increasing number of experts now believe an economic downturn is inevitable.
Under growing pressure, President Joe Biden did acknowledge the prospect of a “slight recession” in an interview with CNN earlier this month, but still added that it is not something he actively anticipates.
However, updated projections by Bloomberg Economics published on Oct. 17 forecasted a 100 percent chance of a recession at some point within the next 12 months, while the International Monetary Fund (IMF) has also sounded the alarm on a potential global recession.