[Summers dismisses “supply-side” solutions, such as tax reform, improving workforce skills, and promoting innovation, as “very unlikely to do much over the next five to ten years.” He also rejects the policy approach that the United States has followed since the recovery got underway, which has been to keep interest rates as low as possible indefinitely, as ultimately unsustainable. For Summers this “virtually insures the emergence of substantial financial bubbles and dangerous buildups in leverage,” returning us to exactly where we were in the run-up to the Great Recession. Instead, Summers sensibly calls for more government spending, with a special emphasis on infrastructure.]
Posted on: Mon, 30 Jun 2014 17:52:49 +0000
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