Larry Summers, a top economic adviser to former President Obama, overturned the $ 1.9 trillion coronavirus stimulus package signed by President Biden
Joe Biden Russia, China Tensions Rise With White House New Challenges Emerge For Biden After Strong Start Feinstein Opens Door To Support Filibuster 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 light of the aid package.
“I think this is the least responsible macroeconomic policy we have pursued for the past 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 coming years, with the US potentially facing stagflation or economic stagnation.
Summers also warned that the US would not see inflation because the Federal Reserve would “ hit the brakes, ” destabilize the markets and sink the economy near a recession.
“There are currently more risks that macroeconomic policies themselves will have gray consequences than I can remember,” Summers said. “There have been terribly serious moments in the past, but then macroeconomic policies tried to stabilize things.”
“Now there is the real risk that macroeconomic policies will seriously destabilize things,” he concluded.
Summers, who served as Secretary of the Treasury under former President Clinton, was one of the few left-wing economists critical of the US $ 1.9 trillion bailout.
In an op-ed He warned The Washington Post in February that the risk of inflation associated with the proposal “could have implications for the dollar and financial stability.”
The Biden government has pushed back against inflation fears, citing the risks of not doing enough to stimulate the economy as a result of the pandemic.