Economic Recession More Likely Than Not Says Former Treasury Secretary Lawrence Summers
CNN’s State of the Union talk show highlighted two hot takes Sunday from former Treasury Secretary Lawrence Summers. The most startling was his pronouncement that an economic ecession was “more likely than not” within the next two years.
Summers’s statement was in opposition to current Treasury Secretary Janet Yellen’s earlier comment that there is nothing to suggest a recession is in the works. But in responding to a question from State of the Union anchor Dana Bash, Summers said he disagreed.
“I think when inflation is as high as it is right now, and unemployment is as low as it is right now, it’s almost always been followed within two years by recession,” Summers said. “I look at what’s happening in the stock and bond markets. I look at where consumer sentiment is. I think there is certainly a risk of recession in the next year. And I think given where we’ve gotten to. It’s more likely than not that we’ll have a recession within the next two years.”
He added, “That is something we can manage. We’ve had them for the whole history of the country. We need to be prepared and to respond quickly if and when it happens. I think the optimists were wrong a year ago in saying we’d have no inflation, and I think they’re wrong now.”
Summers also said the events of January 6, 2021 contribute to the inflation currently battering the economy. He blamed Republican actions causing no confidence and the Trump tax cuts for fueling inflation.
“We should focus on what’s important, not raising input prices for American producers so they’re less competitive, which is what much of those tariffs do. Instead, we should be focusing on things that allow the leakage of key technologies to China and the like. We should pass at long last some kind of legislation, ideally, on a bipartisan basis that would raise the vastly excessive Trump tax cuts, join the world in taxing corporations, take down prescription drug prices. All of that would operate to reduce inflation. There are things we can do.”
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