Name: Unemployment rate could reach Great Depression levels: Trump economic adviser | ABC News
Uploaded: 2020-04-26T18:35:52.000Z
Duration: 7 min 30 s
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The CDC has identified a case of Corona virus in Washington state.

The blue hand strain of this If you remember SARS that affected GDP travel related effects, do you Have you been briefed by the CDC?

Past simple

Words about a pandemic at this Bono were not at all.

And where we have a totally under control, one person coming in from China and we have it under control.

President Trump at the World Economic Forum back in January, we're now joined by one of the senior economic advisers.

Kevin Hassett joins us from the White House this morning.

Thanks for joining us extra this morning.

Let's talk about where the economy is right now.

More than 26 million Americans filing for jobless claims the president this week was was talking about a possible V shaped a recovery short, sharp recovery as early as this summer.

I think a lot of it's going to depend on what happens next.

You know what we've done with the previous legislation is that we built a bridge to the sort of, hopefully the other side of the disease.

But then we have to make sure that we have what it takes to prosper.

And and I think that, you know Senator Klobuchar, who's coming on.

I guess after me is got She's got ideas about what should happen and Republicans have ideas, and I'm sure that over the next three or four weeks, everybody's gonna pull together and come up with a plan to give us the best chance possible for a V shaped recovery.

This is the biggest negative shock that our economy, I think has ever seen.

We're gonna be looking at an unemployment rate that approaches rates that we saw during the Great Depression during the great recession.

Remember, that was the financial crisis around 2008 that we lost 8.7 million jobs and the whole thing.

Right now we're losing that many jobs about every 10 days.

And so the lift for the economic lip for policymakers is an extraordinary one, and last thing I promise not to filibuster.

I've been incredibly pleased to see how much you know.

I know it's been a pretty nasty time in Washington.

How much people have pulled together to get things to happen fast.

It was middle of December when they started to have the stimulus bill discussions with Congress, and it was the middle of February when they passed it.

We just did a major major building a week.

And that's because basically, people care more about their country than the sort of nastiness in Washington that's covered on the news every day.

But we're starting to see that that bipartisanship or nonpartisanship kind of fray right now, especially with those comments last week from Senator McConnell talking about a blue state bailout and states considering bankruptcy, you heard what both governor Hogan and governor would.

That's where they considered a dangerous idea.

Well, first, there's already been quite a quite a bit of age, uh, about 150 billion in the previous around.

The thing I could say is that you know, I'm just on economists, but it feels like the Constitution doesn't really allow states to declare bankruptcy, and so that what's gonna have to happen is that they're gonna have to work things out, and the federal government's going to probably have to help them to.

I know President Trump is open to negotiating in a bipartisan way is as he has been in the previous bills to see, You know what you hear from Democrats, see what they want and then you present them with his own ideas.

But I think that a state going bankrupt of something that's not really been anticipated by the founders and so I'm not sure exactly.

I didn't see the clip from Senator McConnell, but I'm not sure exactly what he was talking about.

The president has said he's open to more aid to the states and localities.

The president's also talked about more infrastructure spending as well.

But one of the things you're starting to see in the Senate among Republican senators is more concerned now about the debt.

They're saying that's what we have to We have to go slow here right now before we approve another package because the debt is climbing so high is that a concern of yours.

You know, I think that the debt level in the U.

Has climbed up to the point where in the economics literature, we see that it can be a sort of long run negative for growth.

And so for me, I think that as we go into the next phase of legislation, we need to think about long run things that we can do to try to get ahead of the curve on debt.

So for sure, we need to do still some short run things.

But I think looking at long run changes that we can make the things to improve the debt situation.

You know, that should be something that should be on the table.

I could advise that I'm not announcing a White House falls right now, but invest what it takes now.

Yeah, I'm just saying that Look at long run changes that we can make to help sort of improve the long run budget situation while we're providing short run stimulus again, you have to understand that this is an unprecedented shock to the economy that we're going to be looking at second quarter negative GDP growth, that's, you know, probably north of minus 15 minus 20%.

It's the biggest negative shock that we've seen since the Second World War, and with that kind of an emergency, the good news is that we've got this bipartisan action that's built a bridge to the other side.

But they're still gonna be a heck of a lot of problems that pop up.

You know the thing that I think we're talking about this in the White House on Friday.

That's most interesting is that we've got this black swan of this event where we actually had to shut everything down.

And the interesting thing is that more or less because of the legislation that's been passed on a bipartisan basis, we haven't seen 50 other black swans.

You know that it's been kind of the markets of them relatively stable, and the people are getting their money, and the firms aren't declaring bankruptcy at a rate that you might expect.

And so I think that we've so far kind of dodged a bullet with that.

And it means that I think markets are hopeful that we could get the V shaped recovery that the president is hoping for, but I don't think you get it if we don't have another round of really solid legislation.

I and but you mentioned the markets that there does seem to be a bit of a disconnect between what we're hearing on the ground from people about the state of the economy right now.

And you just talked about it as well on the fact that the market doesn't appear to be all that far off of its all time highs back in February, is it?

Is it accurately gauging the damage out there and shoot Americans?

Expect that we're gonna be any anywhere close to a new normal anytime soon, right?

And that's why you know, if you look at the data, the thing one of things that really jumps out at me is that the economic harm from the shutdown has spread pretty much uniformly across the country.

Initial claims are actually the worst of any state in Hawaii, and it makes sense because the travel industry so important to that state, but that damage to the economy is uniformed, but the disease is sort of allocated across the country in pockets.

And so what it means is that the decision by the president to sort of tell everybody to slow down at the state level of the shelter in place and so on had a really, really big collective effect.

And now that the states are starting to open up, hopefully following the guidelines of Doctor Berks and Dr Fauci that we could maybe start to get back to normal, I think you're right that markets look like they expect that we'll get back to normal quickly.

And, you know, God willing, that's what happens.

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