Treasury Secretary Steven Mnuchin told Senate Republicans Tuesday that if the Congress doesn’t pass an immediate fiscal stimulus to counter the effects of the national shutdown caused by coronavirus, the United States could soon see an unemployment rate of 20 percent, according to Bloomberg:
“Mnuchin said the fallout actually could be worse than the 2008 financial crisis, according to three people familiar with his remarks, and called for a package of more than $1 trillion that would include direct payments to everyday Americans.”
During his briefing of Republicans, Mnuchin also noted that Americans simply aren’t spending at the moment:
“One administration official said that Trump’s aides had received alarming information from businesses in recent days, including data from credit card companies that showed purchases falling off a cliff. Americans simply aren’t buying anything, the official said.”
When plans for an economic stimulus package were first mentioned last week, the amount varied from $500 million to $850 billion, but President Donald Trump then raised the idea of a $1 trillion package:
“At a White House meeting Monday night, Trump reviewed Mnuchin’s plan for an $850 billion stimulus. Why not make it a trillion, Trump said. If you want to go big, go big, the president remarked, according to three people familiar with the meeting, who like others cited in this story asked not to be identified discussing internal White House deliberations.”
The new amount that will likely be presented to Congress by the administration is $1.2 trillion, significantly larger than the $831 million stimulus passed in 2009 during the height of the recession caused by the meltdown of the financial sector.
But it remains to be seen if the $1.2 trillion would make a difference at a time when many Americans are afraid to go out and make purchases, though the money would indeed be helpful for those who have been laid off and are facing numerous financial obligations such as rent and utilities.
Featured Image Via NBC News