“Most, If Not All” Of The American Economy Should Reopen By Summer’s End, Mnuchin Says

During an appearance on Fox Business yesterday, Treasury Secretary Steven Mnuchin said he expects “most, if not all,” of the American economy to reopen by the end of August, offering one of the first timelines – however informal – for what American workers should expect regarding their near-term financial future.

“We’re operating under the environment that we are going to open up parts of the economy and we’re looking forward to – by the time we get later in the summer – having most of the economy, if not all of the economy, open,” Mnuchin said.

Moreover, once the House passes the $484 billion government rescue package passed yesterday by the Senate, small businesses in the US should have all the capital they need to survive the crisis, Mnuchin said. Although so far, at least, the program’s apparent failure to allocate funds to where they’re most badly needed doesn’t exactly inspire confidence.

Federal programs have dedicated some $600 billion to supporting businesses, Mnuchin said, and that figure can be leveraged by the Fed into some $6 trillion of liquidity. The secretary said he “hopes” this lofty sum will be enough.

“I hope it is enough,” Mnuchin said.Part of the rescue funds provided to the Treasury Department can be leveraged through Federal Reserve lending facilities for as much as $6 trillion in liquidity.

We hope so, too. Because even before this latest bill passes, the 2019-2020 federal budget deficit has already tripled to $4 trillion.

“We need to spend what it takes to win the war,” Mnuchin said, adding that interest rates on the additional debt will be relatively low. “On the other hand, we are sensitive to the economic impact of putting on debt and that’s something that the president is reviewing with us very carefully.”

But Americans can worry about fiscally responsibility later. Right now, we have a virus to kill, and many wealthy investors at risk of potentially needing to sell one of their summer homes.