Clinton-Era Treasury Secretary Warns Inflation Is Primary Risk to Economy, Not Excessive Slack

Contact Your Elected Officials
The Epoch Times

Larry Summers, who served as treasury secretary under President Bill Clinton and director of the National Economic Council under President Barack Obama, has issued a stark warning that inflation, rather than “excessive slack” in the economy as it bounces back from the pandemic recession, has now become the chief risk.

Summers penned an op-ed in The Washington Post on May 24, 2021 in which said that “even six months ago, it was reasonable to regard slow growth, high unemployment, and deflationary pressures as the predominant risk to the economy.”

But the recent stream of economic data, including a sharp rise in the consumer price index, record-high levels of job openings, business hiring difficulties, growing wages, and an economy growing at its fastest pace in decades, strongly suggest that inflation is looming ever larger as the key risk, he argued.

“Now, the primary risk to the U.S. economy is overheating—and inflation,” he wrote.

“This is not just conjecture,” Summers wrote. “The consumer price index rose at a 7.5 percent annual rate in the first quarter, and inflation expectations jumped at the fastest rate since inflation indexed bonds were introduced a generation ago. Already, consumer prices have risen almost as much as the Fed predicted for the whole year.”

Inflationary pressures are growing due to a demand boost fueled by some $2.5 trillion in savings households have built up during the pandemic, trillions of dollars in federal fiscal stimulus, frothy equity, and real estate markets, and the Federal Reserve’s asset purchasing program and commitment to keeping rates near zero into 2024, he said.

While crediting the “aggressive” COVID-19 containment policies and “strong” fiscal and monetary policies for helping the U.S. economy recover faster than other industrial nations from the pandemic lows, Summers cautioned that the newly emerging conditions, including labor shortages and projections that suggest unemployment could fall below four percent over the next 12 months, “require new approaches” from policymakers to sidestep a sharp economic contraction.

BY TOM OZIMEK

Read Full Article on TheEpochTimes.com

The Thinking Conservative
The Thinking Conservativehttps://www.thethinkingconservative.com/
The goal of THE THINKING CONSERVATIVE is to help us educate ourselves on conservative topics of importance to our freedom and our pursuit of happiness. We do this by sharing conservative opinions on all kinds of subjects, from all types of people, and all kinds of media, in a way that will challenge our perceptions and help us to make educated choices.

Canada Forces Man to Remove Cameras From Private Property Amid Anti-Racism Push

Government expands its surveillance powers, while restricting citizens from monitoring their own property, citing concerns over “racism.”

Are the E. Jean Carroll Lawsuits a RICO Case?

Trump lost his appeal in the E. Jean Carroll cases, leaving him liable for $83.3M. He plans to take the matter to the U.S. Supreme Court.

All Apologies For the Culture War Slop

"Forgive me for ignoring the elite-driven political/economic excesses, focusing instead on divisive culture war slop."

Rising sea levels are less of a threat than we were told

New study challenges climate alarmism: sea levels aren't rising faster than the past century, despite dire warnings of floods and mass migrations.

President Trump is Being Wrongfully Obstructed on Tariffs

Podcaster Zach De Gregorio, in “Wolves And Finance,” delivers a sharp editorial unpacking the truth behind Trump’s international tariff policies.

Authors of ‘Astonishing’ Study Showing Unvaccinated Kids Are Healthier Refused to Go Public With Results

Attorney Aaron Siri told the Senate a major study found vaccinated children were significantly more likely to develop chronic diseases.

US Government Imposes Sanctions on Cyber Scam Centers in Southeast Asia

U.S. govt has imposed sanctions on 19 individuals and entities for their alleged roles in an extensive network of scam centers in Burma and Cambodia.

DOJ Announces Federal Charges Against Suspect in Fatal Stabbing of Ukrainian Woman

DOJ charged man accused of fatally stabbing Ukrainian refugee on a light-rail in Charlotte, amid a growing national outcry over her murder.

Texas A&M Ousts 2 Officials After Student and Professor Clash Over Gender Identity Lesson

Texas A&M officials were removed and DOJ probe launched after video showed prof. dismissing student over gender lesson in children's literature class.

Trump Runs out of Patience With China, Sharpens His Words

President Donald Trump’s recent remarks targeting China and its allies mark a noticeable shift in tone.

Trump Signs Order Renaming Department of Defense as Department of War

President Donald Trump on Sept. 5 signed an executive order renaming the Department of Defense as the Department of War.

Trump Signs Executive Order Targeting Countries That Unlawfully Detain Americans

President Trump signed an EO on targeting the unlawful detention of American citizens around the world and to facilitate the release of hostages.

Trump Sends Warning to Venezuela After US Military Strikes Boat Allegedly Carrying Drugs

President Trump sent a warning to Venezuela after the U.S. military struck what the administration says was a boat carrying drugs in the Caribbean.
spot_img

Related Articles

Popular Categories

MAGA Business Central