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The coronavirus pandemic has pushed U.S. unemployment to the highest level since the Great Depression, and according to Mark Cuban, the federal government needs to respond in scale to the economic catastrophe with a program guaranteeing jobs to millions of out-of-work Americans.
"If we would’ve had this discussion four months ago, I would’ve said it’s a crazy idea, there’s no way to do it, and that as much as possible, you let the free market do what it can," Cuban told FOX Business on Monday night. "We’ve never been in a situation like this."
In the two months since the virus outbreak paralyzed the nation’s economy, more than 36 million workers have filed for first-time unemployment benefits, a stunning sign of the depth of the economic calamity inflicted by the crisis. In the span of one month, the virus destroyed all of the jobs created in the past decade.
Federal Reserve Chairman Jerome Powell warned earlier this week the jobless rate could ultimately climb as high as 25 percent, even as some states begin to roll back stay-at-home measures.
The only way to cauterize the unemployment blood bath, Cuban said, is for the federal government to intervene as it did during the Great Depression.
At the heart of the New Deal, enacted by Franklin D. Roosevelt at the height of the Depression in 1933, was direct job-creation. Workers were responsible for the construction of airports, schools, hospitals, bridges, irrigation systems and roads; for a solid decade, the government remained the nation’s largest employer.
“I think with government intervention on a transitional basis, not permanent — and I know that creates its own set of issues — I think the government can be supportive, to help create demand for the markets and even put together a federal jobs program to have jobs that do things that are productive,” he said.
He proposed the government could hire workers to fill much-needed jobs like testing, tracking and tracing for COVID-19, as well as care for members of the vulnerable population like the elderly or those with pre-existing conditions who are unable to leave their homes.
The jobs, he suggested, could be run through corporations like AmeriCorps, which is set up to be in supportive positions around the country. He estimated it could create about 4 million jobs for three to four years before the government sunsets the roles, “unless there’s a specific need for them.”
He also pushed back against potential criticism from free-market advocates who argue the economy will rebound on its own; even if half of the jobs already lost during the outbreak return this year, that would still leave 18 million Americans out of work.
“I don’t see the free market generating the net increase of 18 million jobs over the next two years,” he said.
If lawmakers create a federal job guarantee, it could jump-start the economy, which has languished as consumers — who are either unemployed or worried about losing their job — have stopped spending and started saving. Consumers are the biggest driver of the nation’s economy, accounting for roughly two-thirds of the GDP.
Until the government gets the program up and running, Cuban said the U.S. needs to issue $1,000 checks to every American household every two weeks for the next two months, with the caveat that the money must be spent within 10 days of receipt or it expires. He estimated it would cost about $500 billion.
Cuban -- who has an advisory role on President Trump’s “Opening Our Country” economic council -- has not yet spoken to White House officials about his proposal, said he intends to do so in the near term.
"We have an opportunity for the economy to be even bigger over the next five to seven years," he said. "But that means there will be a lot of disruption. There will be companies that are created out of this that just change the game, and hopefully allow us to compete even more strongly internationally."
So far, Congress has passed four massive stimulus packages totaling nearly $3 trillion to blunt the economic pain from the outbreak of the virus. That includes the $2.2 trillion CARES Act signed into law at the end of March, which sent one-time payments of up to $1,200 to Americans who earn less than $99,000.
House Democrats passed a $3 trillion relief package last week that would send another round of $1,200 checks to American adults and children and expand the number of people who are eligible to receive the government aid. The payments would be capped at $6,000 per household. Senate Republicans have declared it dead on arrival.