Former U.S. Treasury Secretary under Bill Clinton and former Harvard president Lawrence Summers wants to throw more cash at consumers (especially those most in need) and the economy, hoping that it will solve the nation’s current economic woes (WSJ):
“I believe the balance of risks suggest a compelling case for a significant fiscal stimulus program that increases the deficit in the short run” but not over the medium to longer term, he said. The program may be most beneficial if it includes new measures for food stamps, unemployment insurance and other policies aimed at supporting low-income families, said Summers. He also argued in favour of new infrastructure investment as well as changes in Medicaid reimbursement rules and new funding to help low-income residents pay their heating bills.
These sentiments echo Paul Krugman, who also says the US needs a huge stimulus.
These types of policies are likely indicative of what Obamanomics would look like. If Obama is elected, he’s virtually assured to have a Democratic Congress as well. If the current economic crisis continues, Obama will listen to economists on both sides of the aisle, but Summers and Krugman will likely win him over quicker than Larry Kudlow and George Will.
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