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Local expert: It's hard to know if a recession is coming in the near future

Posted at 11:29 PM, Aug 20, 2019
and last updated 2019-08-21 02:40:25-04

BAKERSFIELD, Calif. — As President Trump downplays talk of a looming recession, ABC News has learned that the White House is quietly scrambling to come up with a tax plan that might stimulate the economy if it should show signs of weakening.

"Our economy is incredible. Our jobs, you look at the jobs market but you have to be proactive," President Trump said.

With the 2020 election just around the corner and economic experts predicting a potential downturn in the economy, White House officials tell ABC News that they're considering additional payroll tax cuts that could put more money in the pockets of Americans.

"We're looking at various tax reductions, but I'm looking at that all the time anyway, tax reductions, that's one of the reasons we're at a strong economic position. We're the number one country anywhere in the world by far," Trump said.

The U.S.Bureau of Economic Analysis predicts that the GDP will drop from 3.1 percent in the new year to 2.1 percent in the second quarter. President Trump has touted the strong stock market as a sign of the success of his presidency, but just last week the Dow tumbled 800 points in one day and then rallied the next.

"We will go into a recession. Everyone says 'well, do I expect a recession?' and I guarantee we will be in recession. The question is when. You know it could be next year, it could be 6 months from now, it could be 20 years from now," said Garro Ellis, A financial advisor at Moneywise Wealth Management Incorporated.

A survey by U.S. business economists finds that 34 percent believe there will be a recession by the end of 2021. Some in Kern county believe the fear of a recession is fueled by politics.

"I think the economy numbers are too strong, and the unemployment is great. Things are going good in this country, but we just got a lot of opposition that's fighting against trump," said Tehachapi resident Frank Tomlin.

"I think there's a lot of political narrative that you got to sort out before you would come to that conclusion. I think there's going to be some market fluctuation and some correcting along the way but I don't see a recession," said Bakersfield resident Roger Fessler.

Although a recession is far from certain, the White House claims that conditions would be worse under a democratic president.

"Taxes would skyrocket. The stock market would tank. Jobs would vanish and we would get that recession these naysayers keep talking about," said U.S. Vice President Mike Pence.

Ellis says if he was to try to predict a recession, he's eyeing 2020, and he believes it would be so mild that we may not even know it until six months after.