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Lawrence H. Summers

@LHSummers

9 Sep

@Noahpinion

My interview with @Noahpinion where we discuss the 2008-2009 financial crisis, the threat of inflation, economic policy priorities and the culture of the economic profession.

noahpinion.substack.com/p/interview-la…

I am confident that any reasonable observer will conclude that the constraints on stimulus proposed & enacted were political rather than economic in '08/'09. This view is supported by the fact that Congress cutback the Admin's proposals before passing them by a razor thin margin.

My arguments re: inflation do not derive from a specific econometric model. I believe the problem with much of the conventional wisdom is that models fit to the last 40 years of data, where inflation has never accelerated, will almost definitionally yield complacent conclusions.

Read 10 tweets

Lawrence H. Summers

@LHSummers

8 Sep

More vaccination is necessary for Covid control. I am not convinced of its sufficiency. There is a critical go forward role for testing and isolating the infected and for masking. We can all rejoin the world but for a time not on the same terms as before.

@DLeonhardt

I am a non-alarmist who is proud of not getting spun up by anecdotes to become fearful. But I found @DLeonhardt's @nytimes complacency regarding risks to the vaccinated to be typical of widespread views and dangerously misplaced.

nytimes.com/2021/09/07/bri…

@DLeonhardt

At the 1/5000 daily probability @DLeonhardt estimates the chance that a close relative (nephew most distant counted) will get Covid in next 6 months is two thirds.

Read 12 tweets

Lawrence H. Summers

@LHSummers

14 Jul

@nytimes

.@nytimes @bencasselman @jeannasmialek write interesting article stressing distinctions btw 1960s when inflation accelerated & present moment. In fact, I think most factors point to more cause for concern now than in 1966 when inflation accelerated 3-4 pts in 4 yrs. Consider this

https://twitter.com/bencasselman/status/1413175291887882248

1/Then, the deficit was in range of 3 percent. Now the deficit is in the range of 15 percent.

2/Then, nominal and real interest rates then were significantly positive and Fed has no big balance sheet. Now, nominal rates are essentially 0, real rates are negative and the Fed is growing its balance sheet at a rate of more than a trillion a year.

Read 8 tweets

Lawrence H. Summers

@LHSummers

9 Jul

@Tharman_S

Today in Venice @Tharman_S @NOIweala & I presented a report to G20 fin. ministers & central bank govs on financing for #pandemicpreparedness. At press conference I said: For none of us is this our first rodeo w a global issue that requires a global collective response. #G20HLIP

For all of us, this is the first time where we have seen one where the expenditure of tens of billions of dollars is likely to prevent the need for spending tens of trillions of dollars down the road.

It is nearly certain we will see another COVID, the question is whether we will as international community be ready.

Read 11 tweets

Lawrence H. Summers

@LHSummers

28 Jun

1. I am thrilled to see bipartisan support for tax compliance efforts. Investing in IRS will raise substantial revenue and create a more efficient and equitable tax system.

@WSJOpinion

2. The @WSJEditorial board disagrees, and shockingly argues that *increasing deficits* is preferable to cracking down on tax cheats.

Here is why they are wrong....
wsj.com/articles/a-bip… via @WSJOpinion

3. @WSJEditorial suggests that it is mere conjecture that evasion results in sig losses.

This is untrue. The IRS estimates tax gap w/ audit studies. Btwn 2011-2013, owed b/ uncollected taxes totaled $440B+

Extrapolating for growth, tax gap $600B this year, $7T in next decade.

Read 14 tweets

Lawrence H. Summers

@LHSummers

10 Jun

@porszag

@porszag's recent column is typical of many analysts defending policymakers relative serenity about inflation.
bloomberg.com/opinion/articl… via @bopinion

@porszag

.@porszag cites superforecasters who think there is only a 42 percent chance of inflation exceeding 3 percent for the year. The Administration budget projections (perhaps reflecting lags in the process) call for inflation closer to 2 percent this year.

Given that inflation has totaled 2.7 percent in first 5 months of this year I think odds are better than 42 percent of higher 3 percent inflation in first half of the year!

Read 11 tweets

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