Former Treasury Secretary Lawrence Summers warned that the US is now turning to a stagnation thanks to tariff increases on the train.
Summers, Bloomberg Television’s “is not more likely than we will experience stagnation – and we will see that 2 million people are unemployed in the context of stagnation,” he said. Wall Street Week With David Westin. “We will see losses in household income” or $ 5,000 per family or more.
Summers, a professor of Harvard University and contributes to Bloomberg TV, will be “very important choices in the coming weeks ilişkin about the recipe plans of President Donald Trump, which makes even depression wonderful”. The authority will be wisely to ilmemış To reclaim the declared policies ”.
Summers, financial markets, “amazingly speaks clarity” about the impact of tariffs – shares have increased in any headline that proposes to relax and stressed that the taxes will continue.
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“In a stagnation context, it is likely to see that the current levels of the markets have reached significantly below,” Summers said. “I would be surprised about these steps and markets,” he said.
He said that the economic decline of the US would have various negative effects, including a wider budget deficit. “There will be financial difficulties in the global economy that will affect high -risk companies and high -risk countries.”
Sunday ‘alarm’
Although it is hard to know about the risk of turning into a financial crisis, the former treasury chief emphasized the tightening of the regulations since the 2007-09 melting to direct financial firms to be written in capital letters and to direct the joke of the system. Deputy Treasury Secretary Michael Faulkender said that on Tuesday, “liquidity continues to flow” and there was no “obstacles” despite market volatility.
Summers, about the internal integrity of the markets, I am less worried about the internal integrity of the markets – which I think is one of the alarm, ”Summers said. If he doesn’t talk about the concerns of some company managers and academic leaders about policy actions, the markets said, bir A very important signal about where things go. ”
He said that the US was faced with a recession of his own policy for the first time. “There is nothing that causes this difficulty in the outside world. He is induced by the words and actions of President Trump and his administration. “I don’t know it’s a really historical precedent for what has been done right now.”
“If the government supports“ policy errors ,, it would be a significant normality in the economy, ”he said.
‘B’ Student
“There’s nothing complicated about it, Sum Summers said. Summers said that the implementation of a large tax hike to the middle class is that it was clouded with uncertainty, damaging businesses and pushing the economy downwards. “Any ‘B’ student will know that the answer is a supply shock that increases prices and increases unemployment.”
Summers, Washington’s tariff rates II. He said that if he returned to the pre -World War II, it would be very expensive for the US and the world economy ”. “If the losses in the market were sure that they would all be implemented, there would be too much trillion dollars, and the stock market measures only a very small part of such policies.”
This story initially took part in Fortune.com
