Economy Shrinks 5% After White House Said Coronavirus Would Have No Impact

“Trump downplayed the threat of coronavirus and got caught flat footed as the economy bottomed out,” said DNC War Room Director Adrienne Watson. “The White House told us we’d see ‘no material impact’ on the U.S. economy, and yet economic growth last quarter declined by five percent, with the worst still yet to come. Americans can’t afford this.”

In February and March, the White House said coronavirus would have a negligible impact on the U.S. economy.

KUDLOW: “This is principally a public-health problem and the pandemic of course is in China, not the U.S. … Insofar as the economy, we see no material impact.”

KUDLOW: “Well look, the Coronavirus is essentially a China problem, and we’re doing everything we can to help them by the way — offering advice, sending smart people over there, and so forth. It’s not a U.S. problem. The impact on the American economy will be very, very, very small if any.”

KUDLOW: “The fundamentals of the economy are strong. In fact, you know, we’ve had so many business groups in, they’ll tell you, you know, through February, January, February, the economy was rising and the Atlanta Fed GDP now is showing three percent of 3.1 percent.” [White House Media Availability, Washington DC, 3/16/20]

CEA CHAIR PHILIPSON: “I don’t think the coronavirus is as big a threat as people make it out to be.”

Larry Kudlow predicted that coronavirus would only cost the economy 0.2% GDP growth in Q1 of this year.

KUDLOW: “But, preliminary look, NEC, CEA we took a look at it. Maybe two-tenths of one percent in the first quarter.” [Mornings With Maria, Fox Business, 2/4/20]

KUDLOW: “We’re thinking maybe in the first quarter, we lose two or three tenths of GDP—two or three tenths of one percent of GDP.”

KUDLOW: “We really haven’t seen any economic impact. There may be some out there. Our own internal numbers say maybe two-tenths of a percent in the first quarter, but that’s not going to end this growth cycle.”

The Trump administration actually said that coronavirus could spur U.S. business investment and job growth.

KUDLOW: “Kudlow played down the potential wider impact of the virus outbreak on the U.S. economy and on company supply chains that are being curtailed, saying: ‘It’s not a catastrophe. It’s not a disaster.’… Kudlow said he thought the virus outbreak could spur business investment and lead to increases in production in the United States.”

ROSS: “‘So I think it will help to accelerate the return of jobs to North America,’ Mr. Ross said of the coronavirus. ‘Some to U.S., probably some to Mexico as well.’”

After failing to prepare for and mitigate the damage coronavirus did to our economy, the White House is again being overly optimistic about our economic recovery and dragging their feet on much needed relief.

Politico: “President Donald Trump has been quick to declare victory against the coronavirus recession, comparing U.S. economic growth to a ‘rocket ship’ and predicting ‘GREATNESS, and soon!’ Economists are telling a different story…That view stands in stark contrast to projections by the Federal Reserve, the Congressional Budget Office and many economists who say that though the economy is on its way back, a full recovery may take years.”

Washington Post: “White House officials have said they will pass another stimulus package, but appear in no rush to do so. Administration officials say the next bill is not likely to pass until late July. Larry Kudlow, director of the White House National Economic Council, has celebrated the stock market and predicted a ‘strong’ V-shaped recovery because of the relaxation of public health restrictions, dismissing calls to extend emergency unemployment benefits that will expire next month.”