What does the coronavirus pandemic’s unprecedented surge in job loss mean for the American economy? Professor and economist Laura Tyson served as chair of the Council of Economic Advisers during the Clinton administration. She joins Judy Woodruff to discuss whether delivery of federal aid to the unemployed will come soon enough and why the duration of this recession is so difficult to predict.
So, let's take a broader look now at the economic pain this coronavirus crisis is delivering.
I am joined by Laura Tyson, an economist and professor at the University of California at Berkeley. She also served as chair of the President's Council of Economic Advisers and as director of the National Economic Council during the Clinton administration.
Laura Tyson, welcome back to the "NewsHour."
This is so massive. Give us a sense of what the American worker can now look forward to in terms of having a job, being able to count on a paycheck? What are they looking at?
It's important first to note that this is going to be — the second quarter of 2020, we will probably see the biggest decline in GDP production that we have witnessed since World War II, since 1933. There are different measures.
It's really, really big. This is an induced cutback, an induced shutdown. All of those people that spoke across all kinds of industries, all kinds of skill levels, all kinds of ages, you just heard, are affected because we now have essentially 90 percent of the population on some form of shutdown.
So, that's the reality. The question is, can we get through this in a quarter or a quarter or two, and then come out into recovery?
But how do we know it's going to be a quarter? I mean, at this point, we think the virus will run its course, but there are so many unknowns at this point.
I think a lot of people are afraid it's not going to be over in a matter of three months.
I think that is a fear that we all need to live with.
I think we don't know for sure, because, remember, for everyone, we are in this recession because we are trying to battle the only way we know how this virus.
And it is possible that the social distancing and close-down mechanisms we will use will create enough time so we get some effective treatment, not a vaccine, but a treatment…
… so we get testing, because you cannot let people go back without prevalent testing. You just can't.
So — and to get the hospitals better equipped. So, let's think about this quarter as a quarter where we're kind of closing the economy down to build up our defenses against the virus. And if we do that, it will make coming out sooner and a bit easier.
And, in the meantime, Laura Tyson, the government has a — there's this massive relief bill that was passed. The president signed it last week, $2.2 trillion.
When does that turn into tangible relief for people like those we were just listening to? And, by the way, what about the unemployment insurance, the unemployment benefits they are going to be counting on?
So, first of all, let me say — let me just put this in magnitude, because we have, essentially — I kept talking about the quarter we're in, the second quarter.
If you look at the amount of stimulus that is going to be injected from that bill in this period, it's the biggest we have ever had by far, OK? We're talking about, in a quarter, something like 20 percent of GDP we're going to be putting into the stimulus. So it's a big deal.
Now, what your interviewees said is correct. It is very hard to execute this quickly. So, yes, the unemployment compensation rules, which have basically generated a significant amount of potential for the unemployed support, but getting that is difficult.
And I know that state governments — I know my own state is beginning to move their own officials around to go from one part of government service to another, so they can man and women those unemployment offices.
So, yes, there's going to be an execution problem. What I would encourage everyone to do is keep searching.
You will find that. If you — all of those people who have bona fide unemployment positions will be able to get support, but it is going to be difficult and a bit slow, many hours on the phone, many hours filling out forms.
We heard that young woman say she had made over 300 phone calls to the unemployment office, and still wasn't able to get through.
Now, it's, really — again, the sudden nature of this, and the widespread nature of it, it happened so fast, that people have a job one day, and the next day they're told they can't go to work, and the next day they're told they're furloughed or they're unemployed.
So the numbers and speed have basically made it extremely difficult for the agencies which exist in normal times to process something like unemployment claims to do it as rapidly as possible.
All I can say is that, for the individual, it's sticking with it, because there is relief there. And for the states and local governments, I know they are trying to figure out ways to increase the ability of their offices to execute the policies.
Well, it's a crisis the likes of which we couldn't even have imagined before now.
And I know we — you know, we are looking for any way we can to give information to people who are out there and suffering and worried.
Laura Tyson, thank you very much.
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