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Larry Summers Says Latest Coronavirus Stimulus Needs Restraint


Of course, Congress has approved a budget resolution that could lead to a relief package of nearly $2 trillion worth of aid proposed by President Biden. That would include personal checks from the U.S. government to millions of Americans. But some economists, liberal as well as conservative, have concerns that's just too big a bill.

Larry Summers, who served as Treasury secretary under Bill Clinton and National Economic Council director under President Obama, cautioned restraint in an opinion piece for The Washington Post this week. Mr. Summers joins us now from Scottsdale, Ariz. Thanks so much for being with us, sir.

LARRY SUMMERS: Glad to be with you.

SIMON: And what are your concerns?

SUMMERS: Look; I think we need stimulus, and we need it now. We need to support people who are hurting. We need to do much more about the virus. But over time, the country critically needs to make a whole set of public investments of the kind the president talked about as he builds back better. And I'd like to see us have an overall plan - an overall plan for sustainable economic growth that recognizes that our economy only has the capacity to produce that it can have and that it's going to require us to think through the whole strategy even as we provide major support to people.

And I know this is very much in the administration's mind, but as the debate goes on with Congress, as we move towards legislation, I think we need to make sure we're concerned with not overheating the economy and concerned with assuring that there's room for enough public investment.

SIMON: Well...

SUMMERS: Relative to the gap we have, this is much bigger than the stimulus that we did in 2009, and it should be much bigger.

SIMON: Yeah.

SUMMERS: But this is almost five times as large relative to the size of the GDP gap we had. And that's really a lot. That's why I have some concerns.

SIMON: I've got to ask your reaction. As you note, you were involved in that 2009 Relief Act. I got to ask you about a tweet from Senator Brian Schatz of Hawaii. You may have seen it. He says, why should we listen to the economist who admits he went too small last time if he's warning us to go small again? He says, I swear this town is nuts. It's like people can only remember 30 names, so they just keep going back to the same people.

SUMMERS: Respectfully to Senator Schatz, I urged in 2009 - it's in the memo I wrote the president - that the dangers were much more of doing too little than doing too much. If you read President Obama's memoir, it makes clear that the reason we didn't do more was the constraints that were imposed by senators in Congress - senators on both sides, but certainly some of the Democratic senators like Senators Conrad and Dorgan from North Dakota. So the answer to why we were so constrained was not the lack of the desire of the Obama administration to do more. We would have done much more. The constraints were political at a moment when we needed the most. So if Senator Schatz wants to understand that, he should talk to the members of his own caucus who were around at that time.

SIMON: We've got about a minute left, Mr. Summers. The economy created 250,000 fewer jobs in the year through March than had previously been estimated. The Congressional Budget Office says employment won't return to pre-pandemic level until at least 2024. So what better way is there to put money into the economy now, if not a big bill?

SUMMERS: We should put money into the economy. The question is how much. If your bathtub isn't full, you should turn the faucet on, but that doesn't mean you should turn it on as hard as you can and as long as you can. And so the question isn't whether we need big stimulus. The question is, do we need the biggest stimulus in American history? It's the overall scale of the stimulus and it's whether we're using any of it to build a stronger economy or just to give money to people.

SIMON: Thirty second - no, 20 seconds we have left. Do you expect any Democrats to join you?

SUMMERS: I think there's going to be a productive debate from a range of perspectives, and I'm hopeful that that debate will lead us to better legislation.

SIMON: Larry Summers, thanks so much for being with us.

SUMMERS: Thank you. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Scott Simon is one of America's most admired writers and broadcasters. He is the host of Weekend Edition Saturday and is one of the hosts of NPR's morning news podcast Up First. He has reported from all fifty states, five continents, and ten wars, from El Salvador to Sarajevo to Afghanistan and Iraq. His books have chronicled character and characters, in war and peace, sports and art, tragedy and comedy.