Economist Richard D. Wolff is predicting that there will be a recession this year — or by at least 2021.
Wolff, who espouses a Marxian economics ideology that that is critical of capitalism, argues that the economy is long overdue for a downturn from a historical perspective and predicted that the longer the crash takes to hit, the worse it will be.
“Wherever capitalism has settled in the 300 years that this system has dominated the world, in every country, in every region here’s the pattern: Every four to seven years, there’s an economic downturn,” Wolff, a professor at the University of Massachusetts, told Hill.TV in an interview that aired on Monday.
“Based on that — and if you remember that the last big downturn that we had was in 2008 — well then we are overdue,” he added.
Wolff warned that the potential recession could be a “recipe for very serious economic problems,” pointing to the rise of the current debt load.
“What you’re seeing is this terrible combination of the accumulated debt … coupled with the delayed downturn and that is a volatile mixture,” he told Hill.TV.
The Treasury Department has estimated that the U.S. budget deficit will surpass $1 trillion in fiscal 2020. The only other time the country has posted a budget exceeding this number was in the wake of the 2008 financial crisis.
Overall, deficits have skyrocketed under the Trump administration. This is largely attributed to the president’s signature 2017 tax-cut law as well as a number of bipartisan agreements to increase spending on defense and domestic programs.
Wolff’s warnings nevertheless come as the chances of a recession look increasingly more slim. Though recession fears peaked last August when trade tensions reached a new high, the economy added 145,000 jobs in December as expected, and the unemployment rate has continued to hover near a 50-year low of around 3.5 percent.
Trump has also claimed victory on the trade front.
The president last Wednesday called a truce on his trade war with China and signed an initial agreement with Chinese Vice Premier Liu He to end the ongoing tic-for-tac tariff battle.
A day later, the Senate approved Trump’s replacement for the North American Free Trade Agreement (NAFTA).
The NAFTA rewrite, known as the United States-Mexico-Canada Agreement, was approved Thursday in the upper chamber by a resounding margin.
Trump, who has made the economy the centerpiece of his reelection campaign, celebrated the two deals as proof that he has kept his promises to supporters.