Former Treasury Secretary Larry Summers on Sunday said that a recession in the U.S. is not guaranteed, even though historical context has indicated that the country could go into one next year.
“Nothing is inevitable or certain in economics, Chuck,” Summers told host Chuck Todd on NBC’s “Meet the Press.”
“The painful fact, though, is that historically when we’ve had inflation above 4 percent and we’ve had unemployment below 4 percent, essentially always, since World War II, that’s been followed by a recession within the next two years,” said Summers.
The Harvard University professor said that the U.S. may be able to avoid a recession if the Federal Reserve is “extraordinarily skillful and lucky,” though he said the agency has a “very, very difficult job.”
“Perhaps we will be fortunate and there will be sufficiently rapid adjustments in commodity prices and other bottlenecks that will make [recession] not happen,” Summers said.
Summers also said the U.S. should be looking into options including a release of strategic petroleum reserves and tariff reductions.
The economist has frequently criticized the Biden administration’s economic actions and had warned that they would drive up inflation. As far back as the beginning of last year, Summers has criticized the administration’s stimulus packages as being irresponsible.
Summers told Todd on Sunday that the U.S. may have been “too slow” to notice the rate at which the economy was recovering.
“I think we were too slow to pick up on how rapidly the economy was recovering and therefore we injected more demand into the economy both in terms of deficits and in terms of monetary policy than looks today to have been the right amount,” he said.
“But I was concerned last year that we were injecting too much demand into the economy given all the configurations and I don’t think it was a sound strategy to create as big labor shortages as the labor shortages that we did create.”