Former President Donald Trump has warned that the nation could enter an economic depression due to the fiscal policies of President Joe Biden.
Trump made the remark during a “Save America” rally in Prescott Valley, Arizona, on Friday night. The former president said that the country’s highest inflation rate in decades could lead to a state of 1970s-style “stagflation“—a portmanteau of the words “stagnation” and “inflation” and an economic state defined by simultaneous high inflation, high unemployment and a recession. He then suggested that the economy could enter a depression akin to the worldwide Great Depression of 1929 to 1939.
“Real wages are collapsing and we’re on the verge of a devastating—and this is devastating—it’s called stagflation look it up. It’s not good, it’s not good,” said Trump. “What I’m concerned about, they keep talking about having some reversals, I don’t want people mentioning the word ‘depression.’ Because where we’re going now could be a very bad place.”
“We’ve got get this act in order, we have to get this country going, or we’re going to have a serious problem,” he continued. “Not recession. Recession’s a nice word. We’re gonna have a much bigger problem than recession. We’ll have a depression. You know, in 1929 they had this thing called the Depression, you know that right? You wish, they wish, they could have had a recession only.”
While few, if any, economists are currently predicting economic turmoil on the level of the Great Depression, many have recently concluded that a recession may be inevitable due to the high inflation rate. Stagflation is thought to be less likely because unemployment rates have remained very low under Biden.
Larry Summers, a Democrat who served as the top economic adviser to former President Barack Obama, said in an interview released on Friday that avoiding a recession would be unlikely. He predicted that “the odds are probably better than half” that a recession would begin next year, although it could start sooner.
Summers noted that avoiding a recession with the inflation rate remaining “well above” 4 percent—the rate was 9.1 percent at the end of June—and the unemployment rate under 4 percent (currently 3.6 percent) would be a feat that had “never happened in the United States going back 60, 70 years.”
Trump delivered his speech on Friday in support of Republican Arizona gubernatorial candidate Kari Lake, a former TV news anchor who is a staunch supporter of Trump’s false claims that the 2020 presidential election was “stolen” from him due to massive voter fraud.
The appearance also came one day after the House select committee investigating the January 6 siege on the Capitol held a primetime hearing that included video outtakes of Trump refusing to admit that the 2020 election was “over” one day after the Capitol riot, as well as the damning testimony of former aides.
The rally had been due to take place July 16 but was postponed last week following the death of Trump’s ex-wife Ivana Trump, who was found dead in her Manhattan home on July 14. Trump attended the funeral of his former wife, the mother of three of his children, on Wednesday.
Newsweek has reached out to Trump’s office and the White House for comment.
Read More: Donald Trump Warns U.S. Economy Could Reach Levels of Great Depression