Sen. Elizabeth Warren (D-Mass.) warned on Monday that an economic downturn similar to the 2008 crash is coming soon, but not without saying she has a plan to prevent it.
“Warning lights are flashing,” Warren said in a Medium post. “Whether it’s this year or next year, the odds of another economic downturn are high ― and growing. Congress and regulators should act immediately to tamp down these threats before it’s too late.”
In her post, the 2020 presidential candidate mentioned how she correctly predicted the 2008 economic recession, in which millions of people lost their jobs, homes and savings. Warren’s 2003 book with her daughter, “The Two-Income Trap,” shows that the then-law professor and bankruptcy expert warned about the dangers of risky subprime lending and an imminent housing crisis. In the mid-2000s, Warren said families were getting deeper in debt by borrowing against their homes to try and stay out of bankruptcy.
Warren ran the Congressional Oversight Panel overseeing the 2008 bank bailout, and created the Consumer Financial Protection Bureau in 2011 to serve as a watchdog for big banks in response to the financial crisis. Politifact deemed Warren’s claim true that she sounded the alarm on the looming crisis years before it happened, but that not enough people in power listened.
“When I look at the economy today, I see a lot to worry about again. I see a manufacturing sector in recession,” she said. “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.”
Part of Warren’s plan to prevent another economic recession includes reducing household debt and leveraged corporate lending. The plan consists of many ideas she’s already proposed, like raising the minimum wage, strengthening unions, erasing student loan debt and providing universal child care.
The Massachusetts senator also mentioned her Green Manufacturing Plan, which invests $2 trillion in American green research, manufacturing and exporting over the next 10 years. She said this will create more than a million jobs to reverse the manufacturing recession, and help address the climate crisis.
Warren said the U.S. should also limit potential shocks to what she says is an already vulnerable economy in order to prevent a downturn. Limiting such shocks includes forming proper strategies to respond to China instead of starting a trade war, and refusing to breach the debt ceiling.
The proposal is one more plan under Warren’s belt in her policy-first political strategy that’s fueled her climb up to the top tier of presidential contenders.