Ex US Treasury Secretary and Obama's National Economic Council director Larry Summers says he's never seen a more uncertain recovery - particularly if Congress doesn't act "strongly and quickly" to keep stimulus flowing during the pandemic.
Amazingly, this puts Summers on the same side of the fence as GOP lawmakers, who are currently pushing to extend enhanced unemployment benefits which lapsed on Friday - albeit to a lesser extent than the $600 per week granted under the CARES Act.
Summers also doesn't envision the country emerging quickly from the current predicament, and has stressed that it's not just about how big the next stimulus is - but how long the emergency measures last, according to Bloomberg.
"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 told "Bloomberg Wall Street Week" in an interview.
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. It could be weeks before the next round of stimulus is completed given wrangling between the White House and Congress; talks are expected to continue this weekend.
Millions of Americans have been kept afloat financially by supplemental unemployment checks that cut off this month, barring Congressional action. -Bloomberg
"Everybody makes a mistake -- they focus on the size of the package, and they don’t focus on the duration of the package, so they don’t focus on the rate of flow of stimulus," said Summers, adding "We need to maintain a very substantial fiscal impulse in the economy for quite some number of months."
Summers also suggested that it would be far easier to ensure that health-care workers have masks than vaccinating the whole population - when (and if) a COVID-19 vaccine is developed.
Bloomberg also notes that Summers' comments echo thoes of former NY Fed President William Dudley, who on Thursday said that the US economy would be weaker if they don't and now to continue 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 told Bloomberg Television.
Perhaps Elon has a better solution?
As a reminder, I’m in *favor* of universal basic income— Elon Musk (@elonmusk) July 24, 2020