Former U.S. Treasury Secretary Lawrence Summers called for a “major” plan to boost the country’s economic growth and said borrowing to fix aging infrastructure would help lower the jobless rate.
“What we need in the United States is a comprehensive growth strategy to get that rate from a struggling 2 percent to a 3 percent,” Summers said in an interview broadcast on the Fox News program “Sunday Morning Futures With Maria Bartiromo.” “Over time, that would be transforming of job opportunities for millions of Americans.”
Summers, a Harvard University professor, cited the need for repairs to New York’s John F. Kennedy International Airport as a way to help create jobs. His comments echo calls from Treasury Secretary Jacob J. Lew for infrastructure spending in the U.S. and for other nations to take such steps to strengthen demand.
“We could invest in infrastructure in a major way in this country,” Summers said.
While the unemployment rate nationwide was 6.1 percent in August, Summers said it’s higher in the construction industry.
“We can borrow money for the long term in a currency we print ourselves at just about 2.5 percent,” he said. “If now is not the time to repair our infrastructure, I don’t know when that time will come.”
The yield on 10-year Treasury notes was 2.57 percent at the end of last week, according to Bloomberg Bond Trader data.
Sluggish growth isn’t confined to the U.S., with Europe trying to ward off deflation and Japan’s economy struggling to gain traction, Summers said. There’s a “real problem of inadequate growth throughout the industrial world,” he said.
That assessment was shared by International Monetary Fund Managing Director Christine Lagarde.
After a meeting in Cairns, Australia, of central bankers and finance ministers from the Group of 20 economies, she said in a statement that “promoting economic policies that can contribute to a more robust and job-rich recovery is therefore critical at this stage.”
"The global recovery pace “remains low and uneven,” Lagarde said.
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