Kevin Hassett comments on the economy and the future in COVID-19.
GDP Will Have Negative Growth
For the first time in U.S. history, GDP will have negative growth. That is the biggest shock in U.S. history since the Great Depression and the improvement may come slower than the Institute for Health Metrics and Evaluation’s first predictions. The number of deaths per day is not decreasing as predicted.
“There are going to be a bunch of bad numbers for the second quarter”, Hassett said adding that right now is the “biggest negative shocks we’ve ever seen . . . it’s something we need to take seriously”.
The White House and the Congressional Budget Office are optimistic about the second quarter, but Hassett has concerns about the now. In context, the negative GDP growth is the result of a voluntary shut down, not an economic crash. Therefore, it will not take a World War to get us over the bridge to the other side, unlike the Great Depression. At a snapshot, the GDP looks bad, but, while the annual number will still not look great, it will be better than what is going on right now.
“I speak with him every day and I don’t think there is a whole lot we disagree about right now”, Hassett said about reported contradictions between his and Peter Navarro’s statements on the U.S. economy.
Both men advise and serve the Trump administration.
60% Of Unemployed Receive Benefits That Cover Full Salary
“About 60% of American workers have their salary at least fully replaced”, Hassett said. “You want to make sure that people have their normal income or maybe even about a little bit more because they might have extra expenses”.
In New York state, which has the highest number of COVID-19 cases and deaths in the county, under the current plan residents get average unemployment benefits of around $304 weekly, and now a $1,200 stimulus check which the government must provide to all citizens within six to eight weeks. For a minimum wage worker, these benefits will keep them at full salary for six weeks. After that, unemployment benefits in New York state only covers 60% of their income.
Pelosi and McConnell are working on getting another bill passed
Hassett says that Pelosi and McConnell are working on getting another bill passed and that it is very unlikely another bill will not pass through Congress and the Senate. A least one more round of legislation is likely.
“That’s something that we’re studying very carefully”, he said, “I expect it is very likely there will be a phase four deal”.
The phase four deal distributed the individual $1,200 dollars of aid for unemployed. It also supplied aid for farms and small businesses to stay afloat during the crisis. There are various criticisms of the deal, however, with many saying it does not go far enough to protect workers.
“We’re going to be speaking with President Trump . . . about what he thinks should be in there”, Hassett said.