Economists fear Trump’s mass layoffs will trigger 'deep, deep recession' — and soon

22 February

The total number of federal government workers who will lose their jobs because of mass layoffs being pushed by the second Trump Administration and the Elon Musk-led Department of Government Efficiency (DOGE) remains to be seen. But according to reporting from the Washington Post and Newsweek, the number could be as high as 200,000.

In an article published on February 22, Salon's Daria Solovieva examines the layoffs' possible economic impact. And she warns that according to some economists, the layoffs could trigger a major recession.

"A month into President Donald Trump's second term," Solovieva reports, "the Department of Government Efficiency (DOGE) — which is not a government agency, but an outside advisory group — has been on a rampage in what is shaping up to be the biggest purge of the federal government in modern American history…. While most Americans support the idea of making the government run more efficiently, the way these layoffs are carried out is raising concerns about the immediate and long-term impact on the U.S. economy."

One of the economists who is sounding the alarm is Jesse Rothstein, who teaches at the University of California, Berkeley.

In a thread posted on Bluesky on February 18, Rothstein wrote, "It seems almost unavoidable at this point that we are headed for a deep, deep recession. Just based on 200K+ federal firings & pullback of contracts, the March employment report (to be released April 4) seems certain to show bigger job losses than any month ever outside of a few in 2008-9 and 2020…. Add on to that enormous private market uncertainty - how could you hire in these conditions? - and this is going to be very, very bad."

Solovieva notes that the aggressive tariffs Trump is pushing could make the effect of the layoffs even worse.

But Ira Kalish, chief economist at Deloitte, isn't predicting that there will be a recession anytime soon.

Kalish told Salon, "It is hard to make a forecast, as we simply don’t know what the administration will do regarding tariffs. Nor do we have a good indication yet as to what the Congress will do regarding taxes and spending. Assuming no dramatic policy changes this year, I don't see a recession coming in the near future."

Rep. Jasmine Crockett (D-Texas), during an interview with MNSBC's Nicolle Wallace, warned that layoffs in the public sector will negatively affect the private sector.

Crockett told Wallace, "We’re living with this incompetent administration that is literally driving us to a recession at warp speed. All I can say is, Hold on to your money and make sure that you have a way to make money, even if you lose your job."

Read the full Salon article at this link.

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