Sen. Elizabeth Warren (D-Mass.) on Monday warned of a “coming economic crash” and highlighted proposals that could help to prevent another downturn.
“When I look at the economy today, I see a lot to worry about again,” the Massachusetts senator and 2020 presidential contender wrote in an essay on Medium that was titled “The Coming Economic Crash — And How to Stop It.”
“I see a manufacturing sector in recession. I see a precarious economy that is built on debt — both household debt and corporate debt — and that is vulnerable to shocks. And I see a number of serious shocks on the horizon that could cause our economy’s shaky foundation to crumble,” she added.{mosads}
Warren’s comments come as President Trump has touted strong economic data, including stock market records and low unemployment rates, looking to turn them into key selling points for his reelection campaign.
Polls show that voters approve of Trump’s handling of the economy more than they approve of the president overall. Democrats are trying to undercut Trump’s economic arguments by arguing that many middle-class people are still struggling.
Warren wrote that she warned about an economic crash in the years leading up to the 2008 downturn, but that policymakers and banks didn’t listen to her at the time.
She said that there are several economic trends that have her concerned that another downturn is on the horizon. These include rising household and corporate debt, a decline in manufacturing production for two straight quarters, the potential for the U.S. to default on its debt in September if the debt limit isn’t raised before then, and President Trump’s trade war with China.
Warren argued that another economic crisis can be headed off if “we take bold action now to address the underlying problems in the economy.”
She highlighted several of her proposals that could help do this, including her proposals to cancel up to $50,000 in student loan debt for most people with such debt, provide universal child care, provide tuition-free public college and invest in green manufacturing.
She also urged federal regulators to enforce guidance designed to stop banks from issuing risky loans, and urged the Trump administration to come up with a “coherent strategy” to respond to China’s trade tactics and to stop pushing for a “no-deal Brexit.”
Additionally, she called for the debt limit to either be completely eliminated or automatically raised to accommodate Congress’s revenue and spending actions.
“Warning lights are flashing. Whether it’s this year or next year, the odds of another economic downturn are high — and growing,” Warren wrote. “Congress and regulators should act immediately to tamp down these threats before it’s too late.”