Tags: Barack Obama | Coronavirus | Joe Biden | covid relief | larry summers | economy | stimulus

Ex-Obama Adviser: Biden COVID Bill Risks 'Overheating the Economy'

(MSNBC/"Andrea Mitchell Reports")

By    |   Monday, 08 February 2021 02:16 PM

President Joe Biden's $1.9 trillion coronavirus stimulus bill must be passed, as relief is needed, but unless it invests something into the nation's infrastructure, the extra money could create a risk of "overheating the economy," Larry Summers, a key economist under ex-Presidents Barack Obama and Bill Clinton, said Monday. 

"My discomfort is with a 1.9 trillion dollar program that isn't investing in our infrastructure, that isn't investing in early childhood education," Summers, secretary of the treasury under Clinton and the director of the National Economic Council for Obama, told MSNBC's Andrea Mitchell. "It isn't investing in anything green."

He said if the focus is on supporting the economy and expanding its potential, "we'll be increasing supply as well as demand [and] it will be less risk of overheating the economy."

Summers added that he agrees with Biden and Treasury Secretary Janet Yellen that "it's better to err on the side of doing too much rather than err on the side of doing too little." 

However, he's said he's concerned about the goals for the money, considering there was a $900 billion stimulus bill just passed in December. 

"We do need to provide relief," said Summers. "We do need to provide support. The question is how much, and the question is targeting it as strategically as possible."

The numbers also will mean the nation's total household income will be "much more equally distributed" than anyone would expect without the COVID pandemic having happened. 

"The total household income will be 5% larger than was being forecast when we didn't imagine COVID happening at all," said Summers. "For well over half the workers who were laid off, unemployment insurance will provide more money than they would have been receiving if they had continued to work and that doesn't take into account the various bits of tax support that are included in the program."

He said he does agree with strengthening food stamps and helping small businesses, but "we do need to think about what we can afford to do, given the capacity of our economy"

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Politics
President Joe Biden's $1.9 trillion coronavirus stimulus bill must be passed, as relief is needed, but unless it invests something into the nation's infrastructure, the extra money could create a risk of "overheating the economy," Larry Summers, a key economist under...
covid relief, larry summers, economy, stimulus
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2021-16-08
Monday, 08 February 2021 02:16 PM
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