Summers sees worst US macroeconomic policy in 40 years

Former Treasury Secretary Lawrence Summers warned that the United States is suffering the “least responsible” macroeconomic policy in four decades, singling out Democrats and Republicans for creating “enormous” risks.

In his latest attack on the recent rush of stimulus, Summers told David Westin on Bloomberg Television’s “Wall Street Week” that “what was turning on is now turning on,” given the recovery from Covid, it will stoke pressure from demand at the same time as fiscal policy. it has been aggressively relaxed and the Federal Reserve has “stood firm” by committing to loose monetary policy.

“These are the least responsible fiscal macroeconomic policy we’ve had in the last 40 years,” Summers said. “It is driven primarily by the intransigence of the Democratic left and the intransigence and completely irresponsible behavior of the entire Republican Party.”

Former US Treasury Secretary Lawrence H. Summers, a contributor to Wall Street Week, cautions that concerns that the economy could overheat should not be dismissed. He says there is tension between Federal Reserve Chairman Powell’s statements between keeping rates low and maintaining price stability. Joins David Westin on “Bloomberg Wall Street Week.” (

Summers, a senior official in the last two Democratic administrations, has become a leading critic among Democratic-leaning economists of President Joe Biden’s $ 1.9 trillion pandemic plan. Summers warned in the interview that the United States was facing a “rather dramatic fiscal-monetary collision.”

He said there is a one-in-three chance that inflation will accelerate in the next few years and the United States could face stagflation. He also saw the same possibility of no inflation because the Fed would slow down hard and push the economy into recession. The last possibility is that the Fed and the Treasury will achieve rapid growth without inflation.

“But there are more risks right now that macroeconomic policy causes serious risks than I can remember,” said Summers, who is a paid Bloomberg contributor.


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