As Coronavirus Spreads, US Economy May Need $4T To Avoid 20 Percent Unemployment

As Coronavirus Spreads, US Economy May Need $4T To Avoid 20 Percent Unemployment

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Janet Ybarra
Democrat
Former Washington Journalist
Contributor on The Bipartisan Press

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The coronavirus and the COVID-19 pandemic continues to spread worldwide and within the United States, bringing with them economic downturns and woes.

The virus has infected more than 200,000 people and has killed more than 8,000 worldwide. Health departments having reported the biggest spike in COVID-19 deaths earlier this week, the death toll now has surpassed 100, and Donald Trump announced a mutual closing of borders with Canada in an effort to stem the tide of the disease.

Meanwhile, Trump and federal lawmakers all vowed “big” action to rescue the US economy, which could be in for a crash worse than the 2008 meltdown, as governors and mayors have closed restaurants and other businesses which attract crowds of people.

Treasury Secretary Steven Mnuchin, who has served as a point person for the economic aspects of the coronavirus crisis for the Trump administration, warned that unemployment could shoot up to a disastrous 20 percent.

“I think that estimate is entirely realistic because if you look at the range of industries that have already been devastated, you can keep on going down the list, hotels, cruise ships, bars, restaurants, movie theaters, personal training, nail salons. It just goes on and on,” said former Democratic presidential candidate Andrew Yang, whose $1,000-for-every-American universal basic income has been looked at as a model for a part of any stimulus program.

“So 20 percent unemployment to me is what we need to avoid, and the tough truth is that we need to put money into American’s hands as fast as possible so that families can even feed themselves and weather this storm, but even after this money goes into people’s hands, it’s not going to revive small businesses around the country,” Yang added. “It’s not going to revive all of these restaurants and bars that employ many, many people in every community. This is going to be terrible. It’s going to be less terrible if we plow money into people’s hands as quickly as possible.”

Yang said that he has been working with the Trump administration on the benefits of putting direct cash in the hands of Americans at this time.

“We’ve been talking to the administration just trying to share learnings with what cash does in people’s hands, makes them stronger, healthier, mentally healthier, more trusting, more positive, more productive, and we’re just happy to help in this time of need,” the former presidental hopeful said.

While administration officials have embraced Yang’s ideas, the cash benefits in any stimulus program will be means tested, Mnuchin said.

“I think it is clear, we don’t need to send people who make a million dollars a year, checks,” he said.

Although right now the Trump administration is talking about an economic stimulus of about $1 trillion, Anthony Scaramucci, former financier and one-time White House communications director under Trump, said that eventually much more will be needed.

“I agree with what Andrew is saying, you’ve got to get the cash in people’s hands immediately. I personally think it’s not enough,” Scaramucci said during a segment on CNN. “When I did the calculations today in World War II, Don, we spent 20 percent of the GDP in deficit spending. We are now fighting an invisible virus globally, and we need a $3.2 trillion stimulus. Eight hundred [billion dollars] for the Andrew Yang program. That’s $3,000 per adult, you know, $1,500 for children. This is for people below making $85,000 a year.

“They need a $2 trillion gift and granting or lending program for large and small businesses around the United States, and the large businesses have to commit to no layoffs and no share buybacks, and then the last piece of this is $150 billion going to the nation’s hospitals and to create hospital tents where they’re going to be necessary,” Scaramucci added.

All told, that would be an unprecedented $4 trillion, according to Scaramucci.

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