Treasury Secretary Steven Mnuchin predicted that the trillions of dollars Congress has poured into the economy in coronavirus relief packages will pay off as states slowly begin to allow businesses to reopen.
Mnuchin told “Fox News Sunday” that he believes the steps being taken now will yield results in the summer months.
“I think as we begin to reopen the economy in May and June, you’re going to see the economy really bounce back in July, August, September,” Mnuchin said. “And we are putting in an unprecedented amount of fiscal relief into the economy. You’re seeing trillions of dollars that’s making its way into the economy and I think this is going to have a significant impact.”
The secretary downplayed projections from the Congressional Budget Office about a low GDP and high unemployment, as well as a Goldman Sachs prediction that the overall global impact will be four times worse than the 2008 economic crash.
“All these models are based on health assumptions, how quickly we reopen, so we’ll see,” he said, touting liquidity from programs such as the Paycheck Protection Program, enhanced unemployment benefits, and direct payments to Americans.
“As businesses begin to open, you’re going to see demand side of the economy rebound,” he said.
Many small business owners had trouble with the Paycheck Protection Program, which began as part of the CARES Act, as banks were too slow to roll out loan applications and money quickly ran out. Meanwhile, large companies such as Ruth’s Chris were able to obtain money.
When asked about how long the program’s new tranche of $310 billion will last, Mnuchin said, “I actually hope we run out of money quickly so we get the money into the workers’ pockets. At the same time, he said, “we’re going to make sure that this is distributed fairly.”
State officials such as New York Gov. Andrew Cuomo have been hammering Washington for not providing additional assistance to state and local governments. Senate Majority Leader Mitch McConnell, R-Ky., has opposed doing this to bail out states, claiming they can declare bankruptcy instead. Mnuchin said he is prepared to act to help if need be, but wants everyone on board in doing so.
“If we need to spend more money we will, and we’ll only do it with bipartisan support,” he said.
Author: Ronn Blitzer