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Summers told interviewer David Westin that fiscal policy makes a big difference and “the right thing to do is raise taxes right now to raise taxes right now to take some of the demand out of the economy.”
However, a rise in taxes shouldn’t fund fresh outlays, stated Summers, in contrast to US President Joe Biden’s pursued package of tax hikes.
“This is not the time for anything that’s going to be a big new spending program,” Summers told Bloomberg.
Talks regarding Biden’s economic program have hit a stumbling block after Democratic Senator Joe Manchin opposed the program, stating it wouldn’t be “prudent” to act now without another month of inflation data.
“I sure wish we could get past this basically ludicrous economic idea that tax increases are inflationary — it’s just not right,” Summers said, pushing for measures to increase corporate tax revenues, adding that they can “raise substantial revenue by cutting corporate-tax loopholes.”
By Sam Boughedda
