The Washington Post reports that Larry Summers is charging that the Bush administration is not doing enough to prevent a recession, and that the United States faces a truly grim economic prognosis.
Summers, who worked in the Clinton administration, said the risk of a prolonged recession is higher than most economists recognize. He said it is "distinctly possible" that the nation will experience its worst economic conditions since the stagflation of the 1970s and severe recessions of the early '80s.
Summers spoke at the Brookings Institution, home of his economic thinktank, the Hamilton Project, where he charged that the White House has consistently failed to see ominous economic warning signs.
"For the last year, the economic consensus, and the policy actions that have flowed from it, has been consistently behind the curve in recognizing the gravity of the problems in the housing and financial sectors and their consequences for the overall economy," Summers said.
His suggestions? A temporary tax cut across income levels, as well as increased unemployment insurance and food stamp benefits. The Federal Reserve, he argued, has been too focused on preventing inflation, and needs to loosen the money supply.
There is, of course, the possibility that Summers is speaking out because he wants to be a player in the next Democratic administration. I'm sure he does. At the same time, Summers is trying to fill the vacuum of intelligent economic planning within our government. Agree or disagree with his prescriptions, his voice on economic matters is a welcome one.
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