Why Larry Summers sees danger ahead for the economy
By Lori Montgomery November 18
For at least a year -- long before Cameron warned of another looming economic disaster in Monday's Guardian newspaper -- Summers has been ringing alarm bells about the need for national governments, including the U.S. government, to prop up demand and stimulate economic activity.
With Europe stagnant, China cooling and Japan, Russia and Brazil dogged by recession, Summers -- who removed himself from the running for Federal Reserve chairman last year -- argues that we should forget about the national debt and start taking advantage of abnormally low interest rates to borrow and spend on worthwhile investments that will boost growth now and in the future. (..)
Why? Because, he warns, if Europe falls into the same kind of prolonged slump that has plagued Japan for the past 20 years -- a real possibility, economists say -- America's ability "to maintain enough demand to support the global economy will be very much in doubt." (Continua)
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