Former treasury secretary Summers criticises Biden’s fiscal policy

Financial Times/Martin Wolf

Repost from 4-14-2021

composite photo of Lyndon Johnson and Joe Biden

“It could manifest itself in a period of euphoric boom and optimism that leads to unsustainable bubbles, or it could all work out well. But, it doesn’t seem to me that the preponderant probability is that it will work out well. So I’m concerned that what is being done is substantially excessive.” – Larry Summers

USAGOLD note: We should keep in mind that Summers is probably the leading light in Democrat circles when it comes to economic policy. He is the former Secretary of the Treasury under Bill Clinton, so his going off the reservation is an event in and of itself. The excessive policy will likely yield excessive results. It is difficult to read through this interview without concluding that a portfolio hedge at this juncture makes a great deal of sense. The Biden administration has already struck out on a path from which there is no return. Summers likens the Biden administration’s policies to the era of Lyndon Johnson and an economic experiment that did not work out well for the Democratic Party. “I think there is significant risk,: he says that something of the same kind will happen today.” Following the Johnson years, the U.S. devalued the dollar, launched the fiat money system, and ignited the runaway inflation of the 1970s.

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