Mnuchin Warns of 'Permanent Economic Damage' if States Don't Reopen

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Posted: May 10, 2020 3:15 PM

Treasury Sec. Steve Mnuchin told Chris Wallace on "Fox News Sunday" that while states need to be thoughtful in their approach to reopening, failure to reopen soon will result in "permanent economic damage."

Wallace asked Sec. Mnuchin about the potential risks from both a health and economic standpoint if states reopen too quickly. 

"Chris, if we do this carefully, working with the governors, I don't think there is a considerable risk," Mnuchin explained. "Matter of fact, I think there is a considerable risk of not reopening. You’re talking about what would be permanent economic damage to the American public, and we're going to reopen in a very thoughtful way that gets people back to work safely, that has them social distance."

Mnuchin said businesses can incorporate safety practices and allow employees to continue teleworking from home. He also said some places in the U.S. experienced worse outbreaks than others and infections are being closely monitored. 

Earlier in the interview, Mnuchin outlined his forecast for the U.S. economy. 

"The reported numbers are probably going to get worse before they get better, but that's why we're focused on rebuilding this economy," Mnuchin explained. "We'll have a better third quarter, a better fourth quarter, and next year is going to be a great year."

Wallace characterized the secretary's predictions as "rosy" before asking if the secretary's outlook was "based on economic reality or the November election?"

"My numbers aren't rosy," Mnuchin rebutted. "What I said is 'you're going to have a very, very bad second quarter, and then I think you're going to see a bounce back from a low standpoint.'"

Mnuchin said economic models never work in predicting how the economy will react after being closed down for medical reasons. 

"[M]y predictions are based upon what I see as the rate of reopening in a careful way," he said. Mnuchin said personal conversations he's had with doctors about the development of a vaccine, viral therapies and better testing also give the secretary reason to believe states will be in a strong position to stay open.

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