Larry Summers, one of former President Obama’s top economic advisers, broke the $ 1.9 trillion coronavirus stimulus package signed by President biden
Joe BidenRussia, China, tensions rise with the White House New challenges arise for Biden after a strong start Feinstein opens doors to support obstruction reform MORE earlier this month as the “least responsible” economic policy in 40 years.
Speaking at Bloomberg Television’s “Wall Street Week” on Friday, Summers outlined his predictions for the economy in the light of the aid package.
“I think this is the least responsible macroeconomic policy we’ve had in the past 40 years,” said Summers.
“I think it is fundamentally driven by the intransigence of the Democratic left and the intransigence and completely irrational behavior of the entire republican party,” he continued.
Summers warned that there was a third chance that inflation would accelerate in the coming years, with the United States possibly facing stagflation, or economic stagnation.
Summers also warned that the United States would not see inflation because the Federal Reserve would “hit the brakes”, destabilizing markets and sinking the economy on the brink of recession.
“Right now, there are more risks that macroeconomic policy itself will have gray consequences than I can remember,” said Summers. “There were terribly serious times in the past, but macroeconomic policy was trying to stabilize things.”
“Now there is a real risk that macroeconomic policy will destabilize things a lot,” he concluded.
Summers, who was secretary of the Treasury under former President Clinton, was one of the few left-wing economists who criticized the $ 1.9 trillion American Rescue Plan.
In an opinion article to The Washington Post in February, he warned that the inflation risk associated with the proposal could have “consequences for the dollar and financial stability”.
The Biden government resisted fears of inflation, citing the risks of not doing enough to stimulate the economy due to the pandemic.