04/11/2025
What can Americans do now if a recession is truly around the corner? Build up a buffer, Marc Novicoff writes.
“If everybody but the affluent puts off their purchases, cuts back on luxuries, and saves as much as possible, a recession will be guaranteed,” he continues. And that’s not unlikely: “People act with their own best interests in mind, not with the expectation that they can save the macroeconomy.”
But eventually, “enough people hunkering down sends a signal that gets picked up, if not by politicians, then at least by central bankers at the Federal Reserve and its equivalents around the world, who will cut interest rates to spur businesses and consumers to spend once again,” Novicoff explains. This is when the stock market and the economy tend to turn around, the economist David Blanchflower told Novicoff—but government spending is part of the equation too, and “nobody should have any faith” on that front, he told Novicoff.
📸: Spencer Platt / Getty
