Mnuchin Says Unemployment Could Reach 20% Without Government Intervention
Treasury Secretary Steven Mnuchin said that without immediate government action the unemployment rate in the United States could reach 20 percent.
People close to the matter say Mnuchin discussed the scenario with lawmakers. He told members of Congress that he believes the coronavirus impact on the economy will be worse than the 2008 financial crisis. One of the side effects, he said, would be a sharp increase in unemployment.
Mnuchin said unemployment rates would skyrocket unless lawmakers quickly come up with a plan for financial assistance to wage workers and small businesses.
Treasury Department spokeswoman Monica Crowley said, “During the meeting with Senate Republicans today, Secretary Mnuchin used several mathematical examples for illustrative purposes, but he never implied this would be the case.”
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The U.S. Federal Reserve has already taken action by slashing interest rates to zero and by introducing crisis-era lending programs.
This increase in unemployment would be a sharp turn from last month where unemployment rates nationwide fell to a record low of 3.5 percent. However, as the coronavirus continues to spread, there have been more than 6,000 cases reported and over 100 deaths across the country. Many cities are asking citizens to work from home, attend school from home and practice social distancing. Others have also asked restaurants, bars and other venues to close.
The Trump Administration has been working on plans to alleviate the economic burden caused by these precautions taken. One included making direct payments to Americans of $1,000.
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