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Why Alaska Gov. Mike Dunleavy made potentially deadly gamble to jumpstart his state's economy

·4 min read

An extra 233,000 Americans could die by June 30 if the U.S. economy fully reopens, according to new research by the Penn Wharton Budget Model research organization, but up to 18 million jobs could be saved.

That’s a deadly gamble several governors are willing to take in an attempt to save their economies.

Alaska Gov. Mike Dunleavy was among the first to allow businesses to reopen last week. He had previously ordered the shutdown of entertainment facilities, bars, and restaurants on March 18. Alaska has the fewest number of coronavirus cases in the country, 353, and seven deaths in total.

“The reason we’re opening up...is our numbers don’t justify us staying closed,” Dunleavy told Yahoo Finance.

The governor says he’s not overlooking the health of his residents as he tries to jumpstart his state’s economy. “We’re looking at our metrics and [Wednesday], for example, we had zero cases. So we believe that it’s time to get the economy going,” said Dunleavy.

Nevertheless, the governor still took in a large shipment of PPE equipment on Wednesday as he continues to closely monitor the state’s coronavirus infection numbers over the next two weeks.

‘Nobody has written the playbook’

Governors and mayors around the country have asked for more federal aid for their municipalities and states in the next round of fiscal stimulus.

“Nobody has written the playbook on a pandemic here in 2020 obviously, or we wouldn’t be in this position,” said Dunleavy.

While Congress united to pass the $2 trillion CARES Act and another $484 billion in stimulus funding recently, partisan bickering has stalled a much needed rescue package for states and municipalities.

Alaska Gov. Mike Dunleavy speaks to reporters on Wednesday, Feb. 19, 2020, in Juneau, Alaska. Dunleavy has proposed giving Alaskans an additional roughly $1,300 from the state's oil wealth fund on top of the roughly $1,600 they received last fall that he says in keeping with a formula in state law. The formula has not been followed in recent years amid a budget deficit. (AP Photo/Becky Bohrer)
Alaska Gov. Mike Dunleavy speaks to reporters on Wednesday, Feb. 19, 2020, in Juneau, Alaska. (AP Photo/Becky Bohrer)

Senate Majority Leader Mitch McConell lit up a firestorm by suggesting that states should be allowed to declare bankruptcy in order to prevent “blue state bailouts.”

Dunleavy, a Republican, says that while President Trump and Vice President Pence have given the state the help it has needed so far, more is required to stem ongoing economic losses.

“This is not a result of bad planning or a bad business model. This is a result of the state, it’s governments shutting down the economy. When you shut down the economy because of a pandemic, you don’t get the revenue to support your government,” he said. “So we run the risk of laying off police, and firemen, and teachers.”

‘The economic catastrophe is absolutely unfolding’

More than 30 million Americans have lost their jobs in six weeks as a result of the mandated business shutdowns. Alaska is among the states that have been hard hit. 11,187 new unemployment claims were filed last week.

The collapsing tourism industry has contributed to mass layoffs in the state as major cruise lines have cancelled sailing to Alaska.

“We are a cruise ship destination here in Alaska. We had about 2.2 million visitors last year,” Dunleavy said. “[They brought] in over $200 million into the state of Alaska in terms of revenue and well over $1 billion [in] economic activity, even more,” he said adding, “it’s going to be brutal on the state.”

Alaska’s oil sector, the bedrock of the state’s economy, has gotten hammered as well, said Dunleavy.

“We have ANS, Alaska North Slope Crude. We ship down to the West Coast as you’ve probably heard. There’s several tankers off of Long Beach right now, they can’t unload because there’s not enough capacity to unload that oil,” he said. “As a result, our ANS crude is below $10 a barrel, and if that holds that is gonna be tough on the economy. There’s no doubt about it.”

As the governor joins the fight for another round of fiscal stimulus, he has imposed a 14-day quarantine on outside visitors in order to keep the state’s coronavirus caseload low.

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