'We could have a depression': Pelosi warns about coronavirus economic fallout

In the last three weeks, more than 16 million Americans have applied for unemployment benefits.
Image: Nancy Pelosi
Nancy Pelosi speaks to the press after the House passed a $2 trillion stimulus bill, on March 27, 2020, at the US Capitol.Alex Edelman / AFP - Getty Images file

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By Rebecca Shabad

WASHINGTON — House Speaker Nancy Pelosi, D-Calif., warned Thursday night that the economic ramifications of the coronavirus outbreak could lead the U.S. into a depression.

"We could have a depression because so many people are out of work," Pelosi said in an interview on "Mad Money" with CNBC's Jim Cramer.

To help people financially survive this period, Pelosi said, "That is why we have to get the system really energized and working. Let's get out those unemployment checks. Let's get out those direct payments. Let's get these loans freed up, let the banks be the friends to this whole system that they are."

In the last three weeks, more than 16 million Americans have applied for unemployment benefits amid the crisis.

President Donald Trump, who has been itching to return to normalcy, suggested Friday that the economic impact won't be so bad, tweeting, "This week, in only 4 days, we had the biggest Stock Market increase since 1974. We have a great chance for the really big bounce when the Invisible Enemy is gone!"

Pelosi acknowledged that everyone wants to return to work and reenter society again, but she warned that that can't happen until officials assess how widespread the disease is across the country.

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"The shelter-in-place is making a big difference, but we really don't have an evaluation until we know the extent of the problem: testing, testing, testing," she said, adding that the nation is "flying blind" without that data.

"Data, data, data, evidence, science — that is the answer to when we can go back," Pelosi added.

Pelosi was dismissive of the idea of re-opening the country in stages in which some regions' restrictions are eased before others. "Would you like somebody in one of the states that doesn't have shelter-in-place right now crossing the border into where you live?" she asked.

The $2 trillion coronavirus relief package signed into law last month boosts unemployment benefits by $600 each week per person, provides direct payments to individuals and couples making up to a certain income and offers loans to small businesses to keep them afloat.

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Democrats and Republicans want to pass additional funding for small businesses but both sides have been at an impasse over the last two days. Treasury Secretary Steven Mnuchin requested $250 billion earlier this week but Democrats want to double that request and have 10 percent go to community development financial institutions to help farmers, women, veterans and people in rural America who don't have relationships with banks.

Trump tweeted Friday about Democrats blocking the GOP proposal on Thursday and said he would like to see an infrastructure plan and payroll tax cuts in the next major relief measure.

Pelosi recently suggested that Democrats would rather focus on continuing to help more Americans directly in the next phase instead of infrastructure funding. Democrats have opposed Trump's payroll tax cut proposal.