Former U.S. Treasury Secretary Larry Summers said he's never seen a more uncertain recovery, especially if Congress doesn't act "strongly and quickly" to continue economic stimulus to offset the coronavirus pandemic.
More important than the size of the next relief package is how long the emergency measures last, given the vast number of Americans now unemployed, the former Obama and Clinton administration official said in an interview on 'Bloomberg Wall Street Week'.
"I personally doubt what I think is the market's view, which is that we're going to have most people vaccinated and life returning to normal, sometime by spring of next year,” Summers said.
Summers, a former Harvard University president who headed the National Economic Council under President Barack Obama, warned that the U.S. risks the biggest falloff in stimulus in the country’s history as Congress drags its heels.
A growing body of evidence indicates America's rebound is stalling, days before hundreds of billions of dollars' worth of federal aid is set to expire. Millions of Americans have been kept afloat financially by supplemental unemployment checks that cut off this month, barring Congressional action.
His comments echoed those of former New York Fed President William Dudley, who said on Thursday that the U.S. economy will be weaker if the Congress doesn't replace expiring unemployment insurance assistance.
"We're basically right at the edge of a huge fiscal cliff with the expiration of the $600 a week unemployment compensation benefits," Dudley said on Bloomberg Television.
BLOOMBERG
Monday, Jul 27, 2020 · 12:36:41 AM +00:00
·
JoeFriday
UPDATE:
Let’s be clear, the Bloomberg writer mention “as Congress drags its heels”. But it’s the Repub majority in the SENATE that is dragging its heels. Speaker Pelosi and the Dem majority in the House passed their legislation two months and ten days ago.