US economy will bounce back despite getting ‘biggest negative shock’: White House officials

By: |
May 11, 2020 2:47 PM

As a result of the coronavirus pandemic that has claimed nearly 80,000 American lives in the last two months and infected over 13 lakh people, the US economy has come to a standstill.

Several states in the US have now gradually begun to relax the restrictions.Several states in the US have now gradually begun to relax the restrictions.

The US economy will bounce back and have a “great year” in 2021 despite receiving the “biggest negative shock” due to the coronavirus pandemic that has left a record 33 million workers jobless, senior Trump administration officials have said.

As a result of the coronavirus pandemic that has claimed nearly 80,000 American lives in the last two months and infected over 13 lakh people, the US economy has come to a standstill.

“This is no fault of American business. This is not fault of American workers. This is a result of a virus. And that’s why the president and I were determined to put together the largest economic program ever to help American workers get through this,” US Treasury Secretary Steven Mnuchin told Fox News on Sunday.

More than 33 million Americans have lost their jobs in the last two months. The entire travel and tourism industry has collapsed. Manufacturing has come to a standstill and offices have closed down. The unemployment rate is at an all time high, the worst since the Great Depression of the 1930s.

“The reported numbers are probably going to get worse before they get better, but that’s why we’re focused on rebuilding this economy. We’ll have a better third quarter. We’ll have a better fourth quarter. And next year is going to be a great year,” Mnuchin said.

He, however admitted that the economic numbers weren’t rosy.

“What I’ve said is you’re going to have a very, very bad second quarter and then I think you’re going to see a bounce back from a low standpoint. None of the economic models have ever worked in predicting what happens when you close down due to medical reasons,” he said.

Mnuchin said that his predictions were based upon what he sees is the rate of reopening in a careful way.

“It’s also based upon my views and I’ve personally heard from many of the doctors that have vaccines in trials and their expectations of being able to get a vaccine by the end of this year and having real viral treatments… All these things are going to help give American business and American workers the confidence to reopen in a careful and a deliberate way,” he said.

“If we do this carefully, I don’t think there is a considerable risk. Businesses will be able to reopen. This is all being monitored very carefully,” he said.

A lot of businesses can do telework. Not everybody has to come back into the office at the same time. But people will be able to go into stores, some of them will have reservations when they go in, but businesses will be able to reopen, he said.

Echoing Mnuchin’s view, White House senior economic advisor Kevin Hassett said although the pandemic had resulted in the “biggest negative” shock to the US economy the Trump administration was gradually bringing the economy back on track.

“This is the biggest negative shock to an economy that we have ever seen in our lifetimes. And it hit an economy that in January was about the strongest economy we had ever seen,” he told CNN on Sunday.

Several states in the US have now gradually begun to relax the restrictions. President Donald Trump has also urged Americans to start resuming normal life.

“We basically stopped the greatest economy on Earth to save lives. I think that we’re very glad. We have saved lots of lives. We’re very glad that we have done that. Now we’re gradually turning the economy back on. If you go from a stopped economy to an economy that’s turning back on, then it kind of necessarily needs to be trajecting up,” Hassett said.

“Where we are right now in the White House is that we have got a bunch of economies around the country, and really, frankly, around the world starting to turn the lights back on.

“We’re watching what happens both to economic activity and, frankly, to the path of disease as that happens, and so that we expect that, very quickly, we will have a picture about how quickly we can recover, whether we might have to slow the recovery back down because the disease is spreading and so on, he said.

Referring to the USD nine trillion COVID-19 stimulus packages announced by the government, he said the money was still in the process of reaching out to the people.

“There’s still a bunch of it that’s going to be delivered over the next month, we think that we have a little moment, the luxury of a moment, to learn about what’s going on, so that the next step that we take can be prudent,” Hassett said.

More than 27 million Americans have applied for unemployment benefits as they have been laid off due to coronavirus pandemic that has resulted in more than 95 per cent of the country’s 330 million population under stay-at-home order.

“The monies we have already passed to the State can be used for first responders. I think that was an important bit of help that the governors were grateful for. And, of course, if we go to a phase four deal, I think that President Trump has signalled that, while he doesn’t want to bail out the states, he’s willing to help cover some of the unexpected COVID expenses that might have come their way,” Hassett said.

“I think, right now, the key is to watch the data and to make sure that the next move is as smart as the previous three,” he said.

Globally, the death toll due to COVID-19 has gone up to 282,727 with over four million infections reported so far. The US is the worst affected country, according to Johns Hopkins University tally.

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