White House National Economic Council Director Lawrence Summers says the economy’s growth next year is “in doubt.”
He also told Bloomberg that banks should do more to help their customers avoid foreclosure on their homes.
The economy is “no longer in freefall” and has a good chance to resume growth this year, Summers says.
The positive factors include rising exports, fiscal stimulus, and the administration’s foreclosure relief program.
Despite all that, income growth may not “resume in the near term,” he says.
“The pace of growth next year, I think, is very much in doubt and difficult to predict.”
That “will depend crucially on our effectiveness in implementing the programs that have been legislated” and what happens with proposals to reform healthcare, financial regulation and energy, Summers says.
As for the banks, prudent financial institutions will recognize that the profits they’re enjoying are in part a reflection of the commitment government and the broader society have made to the financial system that has enabled them to enjoy those profits, Summers says.
In other words, banks should be willing to modify mortgages.
“Some institutions I think have been very conscious of the kind of contribution they can make, and others have been much slower to get started,” he says.
Economist Nouriel Roubini is more pessimistic.
He tells CNBC, the recovery is going to be “subpar.”
“ I see 1 percent growth in the economy in the next few years,” Roubini says.
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