News

Economy & Business

Mnuchin Warns of ‘Permanent Damage’ to Economy if Shutdowns Are Extended

Treasury Secretary Steve Mnuchin speaks about sanctions against Turkey at a news briefing at the White House, October 11, 2019. (Yuri Gripas/Reuters)

Treasury Secretary Steve Mnuchin on Tuesday warned that continued lockdowns meant to slow the spread of coronavirus could scar the U.S. economy.

“There is the risk of permanent damage” if the economy stays shut, Mnuchin told lawmakers at a hearing of the Senate Banking Committee. “We’re conscious of the health issues and we want to do this in a safe way.”

Mnuchin was joined by Federal Reserve chairman Jerome Powell to answer lawmakers’ questions on the use of funds provided in economic relief legislation passed in March and April. Both officials have warned that the U.S. economy faces a challenging period ahead.

“I think the jobs numbers will be worse before they get better,” Mnuchin said. Job losses already total upwards of 36 million, or about 20 percent of the workforce, with an unemployment rate of about 14 percent.

“This is the biggest shock we’ve seen in living memory,” Powell told the senators. Powell suggested that the federal government may need to increase economic aid even further if local governments are unable to balance their budgets: “We have the evidence of the global financial crisis and the years afterward, where state and local government layoffs and lack of hiring did weigh on economic growth.”

Congress and President Trump have already signed off on economic relief packages approaching $3 trillion. Democrats and some Republicans, notably Missouri senator Josh Hawley, have pushed for additional federal aid to Americans laid off from work during the coronavirus pandemic.

However, Senate Republican leadership has cautioned against additional measures until more data can be gathered on the effectiveness of previous legislation.

“We need to assess what we’ve already done, take a look at what worked and what didn’t work, and we’ll discuss the way forward in the next couple of weeks,” Majority Leader Mitch McConnell (R., Ky.) told reporters on Tuesday.

Send a tip to the news team at NR.

Zachary Evans is a news writer for National Review Online. He is a veteran of the Israeli Defense Forces and a trained violist.

Most Popular

Politics & Policy

Five Thoughts on the George Floyd Story

After a night of riots, looting, and arson in Minneapolis to protest the police killing of George Floyd, five thoughts spring to mind: One: It is always hazardous to draw sweeping conclusions about society from individual criminal cases. Every individual case involves individual facts, and those facts often ... Read More
Politics & Policy

Five Thoughts on the George Floyd Story

After a night of riots, looting, and arson in Minneapolis to protest the police killing of George Floyd, five thoughts spring to mind: One: It is always hazardous to draw sweeping conclusions about society from individual criminal cases. Every individual case involves individual facts, and those facts often ... Read More
White House

There’s No Fix for Trump’s Bad Tweets

Whether social media have been good or bad for society is an open question. Whether social media have been good or bad for President Trump isn’t as difficult to discern. For even the most sober-minded and introspective figures, Twitter can serve as a dangerous temptation. For a man as capricious and mercurial ... Read More
White House

There’s No Fix for Trump’s Bad Tweets

Whether social media have been good or bad for society is an open question. Whether social media have been good or bad for President Trump isn’t as difficult to discern. For even the most sober-minded and introspective figures, Twitter can serve as a dangerous temptation. For a man as capricious and mercurial ... Read More

The Need to Discuss Black-on-Black Crime

Thomas Abt’s book Bleeding Out (2019) has garnered a fair amount of attention for its proposals to deal with gun violence in mainly black urban neighborhoods. The entire focus of the book is on interventions in high-crime locations to stem the violence, including: hot-spots policing, working with young males at ... Read More

The Need to Discuss Black-on-Black Crime

Thomas Abt’s book Bleeding Out (2019) has garnered a fair amount of attention for its proposals to deal with gun violence in mainly black urban neighborhoods. The entire focus of the book is on interventions in high-crime locations to stem the violence, including: hot-spots policing, working with young males at ... Read More
Economy & Business

The Spread of the Debt Virus

The current U.S. budget deficit could soon exceed a record $4 trillion. The massive borrowing is being driven both by prior budget profligacy and by a hurried effort by the Donald Trump administration to pump liquidity into a quarantined America. The shutdown has left the country on the cusp of a ... Read More
Economy & Business

The Spread of the Debt Virus

The current U.S. budget deficit could soon exceed a record $4 trillion. The massive borrowing is being driven both by prior budget profligacy and by a hurried effort by the Donald Trump administration to pump liquidity into a quarantined America. The shutdown has left the country on the cusp of a ... Read More
Economy & Business

Boiling Over

Andrew Ross Sorkin’s frustration over having missed so much of the post-COVID realities in markets and economic life boiled over this morning in one of the more outrageous outbursts I have ever witnessed on financial media. Perhaps this outburst was rivaled only by his behavior during the March COVID market ... Read More
Economy & Business

Boiling Over

Andrew Ross Sorkin’s frustration over having missed so much of the post-COVID realities in markets and economic life boiled over this morning in one of the more outrageous outbursts I have ever witnessed on financial media. Perhaps this outburst was rivaled only by his behavior during the March COVID market ... Read More