Mnuchin Warns Republicans of High Unemployment

SK Ashby
Written by SK Ashby

If Senate Republicans continue to sit on their hands and do nothing, the consequences could be economically apocalyptic according to Treasury Secretary Steve Mnuchin.

Mnuchin spoke to Senate Republicans in private yesterday where he said unemployment could surge as high as 20 percent if they don't pass an aid package.

Washington (CNN)Treasury Secretary Steven Mnuchin warned Republican senators Tuesday morning that without action the coronavirus pandemic could drive up US unemployment to 20%, a Republican Senate source told CNN.

Mnuchin's comments came as he urged Republican senators to act on economic stimulus measures totaling $1 trillion designed to avert that kind of worst case scenario. [...]

In the same meeting, Mnuchin also said he is concerned the economic ramifications of the coronavirus pandemic could be worse than the 2008 financial crisis, the source said.

A Treasury Department spokesperson told CNN that Mnuchin was only providing one possible example and does not actually believe this will happen because the Senate will save the day, but that's not very comforting.

Even if unemployment surges by only half as much as Mnuchin's dire example, it would still rival unemployment during the Great Recession at 10 percent, but it would happen much quicker. It could even happen within the next month.

We could have spent $1 trillion on investments in infrastructure which could have at least blunted the economic impact of the coronavirus by pumping real value into the economy, but most of the economic gains of the Trump era have been based on tax cut-fueled redistribution of wealth from workers to wealthy shareholders. Most of the value that has dropped out of the market in recent weeks was fake value, but that doesn't mean we won't all pay for it in more ways than one.

It's possible this will be the second "Great Recession" created by a Republican president in my lifetime. I know those older than me have seen more recessions, but electing a Republican in the post-Bush era seems to all but guarantee that moments of crisis will turn out much worse than they otherwise would. Everything is bigger under a Republican including recessions.