Larry Summers, a top economic adviser to former President Obama, dropped the $ 1.9 trillion coronavirus stimulus package signed by President Biden
Joe Biden Russia and China tensions rise with White House New challenges for Biden after strong start Feinstein opens the door to support filibuster reform MORE earlier this month as the “least responsible” economic policy of the last 40 years.
Speaking on Bloomberg Television’s “Wall Street Week” on Friday, Summers presented his forecast for the economy in light of the aid package.
“I think this is the least responsible macroeconomic policy we’ve had in the last 40 years,” Summers said.
“I think it is fundamentally driven by the intransigence of the democratic left and the intransigence and completely unreasonable behavior of the entire Republican party,” he continued.
Summers warned that there is a one-third chance that inflation will accelerate in the next few years, with the US likely to face economic stagnation or stagnation.
Summers also warned that the US will not see inflation as the Federal Reserve will “slow down”, destabilizing markets and plunging the economy close to a recession.
“There are more risks right now that macroeconomic policy itself will have gray consequences than I remember,” Summers said. “There have been terrible times in the past, but then macroeconomic policy has tried to stabilize things.”
“Now there is a real risk that macroeconomic policy will be very destabilizing,” he concluded.
Summers, who was Secretary of the Treasury under former President Clinton, was one of the few left-wing economists to criticize the US $ 1.9 trillion bailout plan.
In an op-ed for 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 administration has pushed back against inflation fears, citing the risks of not doing enough to stimulate the economy due to the pandemic.