Former US Treasury Secretary Lawrence Summers accused the country’s government of the most irresponsible macroeconomic policy in the past 40 years.
On Bloomberg Wall Street Week, Summers criticized the government’s recent stimulus measures. According to him, because of them, the pressure of excess demand on the price will increase simultaneously with the aggressive easing of fiscal policy.
At the same time, the Federal Reserve decided to pursue “free” monetary policy.
“This is the most irresponsible fiscal policy that we have pursued in the last 40 years,” he said.
The ex-minister noted that for the most part this situation is associated with the “intransigence” of the left Democrats and the “completely irresponsible” behavior of the Republicans. Summers suggested that with such an economic policy, there is a risk of rising inflation.
In February, the US Department of Commerce reported that the country’s gross domestic product (GDP) fell 3.5% in 2020, the worst since World War II.
At the same time, the department slightly improved the annualized estimate of US GDP in the last quarter of 2020 (from 4 to 4.1%). The Ministry of Trade added that GDP growth reflects both the economic recovery after a sharp downturn and the ongoing consequences of the coronavirus pandemic.