The top economist at the White House acknowledged that a recession could emerge in 2020 but said it is not likely as U.S. firms have made enough investments to withstand downward pressure from a weaker global economy.
Kevin Hassett, who chairs the White House Council of Economic Advisers, highlighted uncertainty about Brexit as a potential drag on the U.S. economy during a news briefing March 19, adding that Europe "seems very close to recession" as a result. Hassett conceded that a global economic slowdown could put downward pressure on demand for U.S. exports, but he said the positive economic effects bolstering the U.S. economy, including those of the 2017 tax bill, will not reach their full potential in a single year.
"I think that the idea that we would have a recession next year is certainly not impossible," Hassett said. "Recessions very often happen, and few people see them coming, but it would be very unusual for such a thing to happen given the massive amount of capital spending and the capacity that's being brought online."
In the annual "Economic Report of the President," the White House projected 3.2% real GDP growth for 2019 and 3.1% for 2020. U.S. GDP growth in 2018 amounted to 2.9%.
The White House's annotated fiscal 2020 budget, released March 18, sounded the alarm on the risks that student loan debt poses to the economy, as that debt has reached almost $1.6 trillion, doubling from $800 billion in 2010. It also cited the fiscal deficit as a potential risk, given that it has grown to $779 billion, or 3.9% of GDP, according to the administration.