CNN‘s state of the Union The talk show highlights two hot takes on Sunday from the former Treasury secretary Lawrence Summers, Most shocking was his announcement that an economic recession was “more likely” within the next two years.
Summers’ statement was in contrast to current Treasury Secretary Janet Yellen’s previous comment that nothing is working to suggest a recession. But in response to a question from state of the Union Anchor Dana Bash, Summers, said she disagrees.
“I think when inflation is as high as it is now, and unemployment is as low as it is now, a recession is almost always followed within two years,” Summers said. “I look at what’s happening in the stock and bond markets. I look at where consumer sentiment is. I think there’s definitely a risk of a recession next year. And I think we’ve been given where We have reached it. It is more likely that we will face a recession within the next two years.”
He said, “It’s something we can manage. We’ve had them for the entire history of the country. We need to be prepared and if it happens we should respond quickly. I think an optimistic one.” Years ago they were wrong to say that we would have no inflation, and I think they are wrong now.
Summers also said that the events of January 6, 2021 contribute to the inflation currently affecting the economy. He blamed the Trump tax cut for fueling mistrust on Republican actions and fueling inflation.
“We should be focusing on how important it is for U.S. producers not to raise input prices, so they are less competitive, which is what most of those tariffs do. Instead, we should focus on things that China does. and allow the leakage of similar key technologies. We should in the long run pass some kind of law, ideally, on a bipartisan basis that would drastically cut Trump’s tax, join the world in taxing corporations, drugs Will take prices down. All this will work to bring down inflation. There are things we can do.”