Claim: President Joe Biden claimed on Monday that his signing of the $1.9 trillion American Rescue Plan started the U.S. 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
Verdict: False.
The U.S. economic recovery did not begin in March of 2021. By that time it was well underway.
If anything, the American Rescue Plan may have derailed the recovery.
The pandemic and lockdowns triggered a severe economic contraction in the U.S., with real gross domestic product contracting at an annualized rate of 5.3 percent in the first quarter of 2020 and an unprecedented 28 percent in the second quarter.
A sudden v-shaped recovery followed. In the third quarter of 2020, the economy grew at a 34.8 percent annual rate. In the fourth quarter of 2020, it grew at a still fast pace of 4.8 percent.
In the first quarter of 2021, which was almost over by the time Biden signed the American Rescue Plan into law, the economy grew 5.2 percent.
Far from starting the recovery, Biden’s spending spree nearly ended it by contributing to a massive rise in inflation. In the first quarter of 2022, the economy grew by a nominal 6.6 percent rate but inflation was running even hotter. As a result, real GDP contracted by two percent. It contracted again, by 0.6 percent, in the second quarter.
