Larry Summers, a top economic adviser to former President Obama, said the $ 1.9 billion coronavirus stimulus package provided by President Biden
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Summers spoke on Bloomberg Television on “Wall Street Week” on Friday, outlining his predictions for the economy in light of the aid package.
“I think this is the least responsible macroeconomic policy we’ve had in the last forty years,” Summers said.
“I think fundamentally, it’s driven by intransigence on the Democratic left and intransigence and utterly unreasonable behavior by the entire Republican Party,” he continued.
Summers warned that there is a third chance that inflation will accelerate over the next few years, with the US potentially facing stagflation, or economic stagnation.
Summers also warned that the US would not see inflation, as the Federal Reserve would ‘brake’, destabilize the market and bring the economy down near a recession.
“At the moment, there are more risks that macroeconomic policies themselves will cause gray consequences than I can remember,” Summers said. “There have been terribly serious moments in the past, but then macroeconomic policies try to stabilize things.”
“There is now a real risk that macroeconomic policies will destabilize things a lot,” he concluded.
Summers, who served as former Treasury Secretary under former President Clinton, was one of the few left-wing economists to criticize the $ 1.9 billion US bailout plan.
In an op-ed for The Washington Post in February, he warned that the risk of inflation associated with the proposal ‘could have consequences for the dollar and financial stability’.
The Biden government has repressed inflation fears, citing the risks of not doing enough to stimulate the economy due to the pandemic.