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Steve Mnuchin: Record 3.3 million unemployed claims “not relevant”



Almost 3.3. millions of Americans applied for unemployment benefits last week as companies battling coronavirus fallout start laying off workers.

The number is astonishing. That’s more than quadrupled the previous record set in 1982.

But the finance secretary does not think there is much to see here. When the legislation has passed, he argued, people will feel good again and the pain right now is temporary.

“I just think these numbers aren̵

7;t relevant right now, and you know if they’re bigger or smaller in the short term,” Steve Mnuchin said in a CNBC interview Thursday morning. “Of course, I mean that there are people who have unemployment claims. And again, the good thing about this bill is that the president protects these people. “

“So, you know, now with these plans, hopefully small businesses will be able to hire back a lot of these people,” he added. “Last week, they did not know if they had protection. They had no cash. They had no choice. Now with this bill that has been tabled by Congress, there is protection. “

This is wishful thinking to put it mildly. Despite its large price tag, economists believe the legislation passed by the Senate on Wednesday is far too modest to meet the scope of the upcoming economic crash.

The $ 349 billion that legislation provides for small businesses will be exhausted quickly, but experts also believe it will take months before the support reaches most small businesses. During that time, many of them will simply fail, and you cannot hire workers unless you have a company.

The most important provision in the rescue bill is a $ 454 billion program monitored by Mnuchin that can be utilized ten times over by the Federal Reserve to essentially do everything Mnuchin and the Fed want to do with it. But companies that get that money will still be allowed to lay off up to 10% of their workforce over the next six months – and that figure would be calculated based on this week’s employment. The 3.3 million people left last week did not count.

Treasury Secretary Steven Mnuchin said people should not really pay attention to the 3.3 million people who filed


Alex Brandon / Associated Press

Treasury Secretary Steven Mnuchin said people should not really pay attention to the 3.3 million people who provided unemployment benefits last week.

The coronavirus crash is not a simple shortage of cash. It is a crisis on several different economic fronts that will require months, if not years, of aggressive government measures to combat.

Global supply chains are breaking down because companies that make goods in other countries cannot access factories and materials that they have relied on for several years. The collapse in US consumer spending is not just returning to normal.

The protection of the legislation for people who are laid off or who are struggling to pay the bills is simply too smart to restore the purchasing power from unusual layoffs, not to mention the fear most families now experience. Every household in America will squeeze their money for the foreseeable future, and the loss of spending will mean a loss of income for companies and lower wages. The loss of American purchasing power will resonate both at home and abroad. This may well culminate in a shock to the financial system that is similar to the breakdown of 2008.

Thursday’s number of unemployed is likely to calculate how many who are unemployed, too. Some people who have tried to apply for unemployment benefits have reported telephone lines and websites frozen and stuck by crushing applicants. And people who are self-employed, undocumented, students or players are not eligible to apply and are therefore not counted.

A HuffPost Guide to Coronavirus




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