The U.S. is going to see a jobless rate comparable to what happened during the Great Depression as it recovers from the novel coronavirus pandemic, Kevin Hassett, President Donald Trump’s economic adviser, said on ABC’s “This Week.”
The unemployment rate peaked at about 25% during the Great Depression. And during the Great Recession, it took roughly 10 months for new unemployment claims to go as high as they now have in less than a month.
“Around 2008, we lost 8.7 million jobs and the whole thing. Right now, we’re losing that many jobs about every 10 days,” he said Sunday. “And so … the economic lift for policymakers is an extraordinary one.”
The president’s economic adviser appeared on “This Week” days after Trump signed the Paycheck Protection Program and Health Care Enhancement Act Friday. The House and Senate last week passed the $484 billion coronavirus aid package to help small businesses, hospitals and first responders.
The measure did not include more money to help state governments. That issue has become a point of contention between Democrats and Senate Majority Leader Mitch McConnell, who recently suggested states file for bankruptcy instead.
When pressed on McConnell’s stance, following interviews with Maryland Gov. Larry Hogan and Michigan Gov. Gretchen Whitmer, Hassett said he didn’t consider bankruptcy as a viable option.
“They considered it a dangerous idea,” Stephanopoulos said of the governors. “They’re saying they need aid. Are they going to get it?”
“I’m just an economist, but it feels like the Constitution doesn’t really allow states to declare bankruptcy,” Hassett replied. “And so what’s going to have to happen is they’re going to have to work things out, and the federal government is going to probably have to help (states), too.”
He added that Trump is open to providing more funding for states.
Some Republicans, including McConnell, have raised concerns about coronavirus aid contributing to the rising national debt, which is expected to soar to 101% of the gross domestic product by October, according to a new projection by the Congressional Budget Office.
Hassett called for consideration of “long-run” changes to reduce debt, but said the V-shaped recovery that Trump is hoping for won’t happen without continued stimulus measures.
“I don’t think you get it if we don’t have another round of really solid legislation,” said Hassett.
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Stephanopoulos also asked about the disconnect between falling consumer confidence and more recent rebounds for the stock market.
“The market doesn’t appear to be all that far off of its all-time highs back in February,” Stephanopoulos said. “Is it accurately gauging the damage out there? And should Americans expect that we’re going to be anywhere close to a new normal anytime soon?”
Hassett stopped short of offering a prediction, but expressed a wish for it to happen swiftly.
“Markets look like they expect that we will get back to normal quickly,” Hassett replied. “And, God willing, that’s what happens.”
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