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Assertion: President Joe Biden stated on Monday that the enactment of the $1.9 trillion American Rescue Plan marked the beginning of the United States’ recovery from the pandemic.
Three years ago today, I signed the American Rescue Plan into law.
— Joe Biden (@JoeBiden) March 11, 2024
It was the start of America’s comeback—the pandemic no longer controls our lives and we are building an economy from the middle out and the bottom up, not the top down. pic.twitter.com/2t4d5ipufx
The commencement of the U.S. economic recovery was not in March 2021; by then, it was already well in progress. If anything, the American Rescue Plan might have disrupted the recovery trajectory.
The pandemic and subsequent lockdowns triggered a significant economic downturn in the U.S., with real gross domestic product (GDP) plummeting at an annualized rate of 5.3 percent in the first quarter of 2020 and an unprecedented 28 percent in the second quarter.
However, a swift V-shaped recovery ensued. In the third quarter of 2020, the economy rebounded with a remarkable 34.8 percent annual growth rate, followed by a still robust growth of 4.8 percent in the fourth quarter of 2020.
By the time President Biden signed the American Rescue Plan into law, in the first quarter of 2021, the economy had already expanded by 5.2 percent.
Contrary to initiating the recovery, Biden’s extensive spending initiatives arguably jeopardized it, contributing to a substantial surge in inflation. Despite nominal GDP growth of 6.6 percent in the first quarter of 2022, inflation was even more pronounced. Consequently, real GDP experienced a contraction of two percent. This contraction persisted, with a further decline of 0.6 percent in the second quarter.
