Saturday, March 20, 2021

Larry Summers Warns Current Irresponsible Macroeconomic Policy is the Worst in at Least 40 Years

Larry Summers

In a  Bloomberg TV interview, former U.S. Treasury Secretary Lawrence Summers warned about current macroeconomic policy.

“I think this is the least responsible fiscal macroeconomic policy we’ve have had for the last 40 years,” he said. 

He said there is a 1/3-chance that inflation will accelerate in the coming years and the U.S. could be face stagflation. He also saw a 1/3-chance of no inflation because the Fed would hit the breaks hard and push the economy near recession. The final possibility is that the Fed and Treasury will get rapid growth without inflation.

“But there are more risks at this moment that macroeconomic policy will cause grave risks than I can remember,” he said.

I rank the price inflation threat much higher than Summers (around 90%0 and Summers looks at things from a Keynesian perspective but you do have to give him credit for being one of the very few mainstream economists speaking out against the current mad government spending and money printing.

He seems to be one of the few that hasn't been swept up into the MMT voodoo world thinking where deficit spending and money printing don't matter.


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