Former Clinton Treasury Secretary Larry Summers has done it again-he’s said something important that isn’t going to make his old gang happy.
At a talk yesterday at Brookings, Summers backed new tax cuts and Fed rate cuts to help consumers and block a possible recession. IBD has the story:
“The largest part of this stimulus,” Summers said, “should come in the form of tax cuts distributed equally among all taxpayers and recipients of tax refunds.”
Other elements of a Summers stimulus package include some of the musty approaches such as increased food stamp benefits and extended unemployment checks.
But it’s the tax cuts and his recommendations that the Federal Reserve Bank ensure that its rate cuts translate into lower credit costs in which we’re interested.
As Summers noted, most post-war economic expansions “did not die of old age. They were murdered by the Federal Reserve in the name of fighting inflation. This was the story in 1958, 1971, 1974 and 1982 as sharp increases in credit costs drove the economy into downturns.”
Note to Larry: Whatever your old pals say, don’t apologize this time.