President Joe Biden has attempted to downplay concerns about a looming economic downturn. However, a member of Biden’s party recently made clear that he isn’t buying those assurances.
In a damning statement, former Obama administration economic adviser Larry Summers said all signs suggest a recession is on the horizon.
Summer predicts recession “by the end of next year”
To support his claim, Summers pointed to “a whole range of indicators,” including market performance, interest rates, consumer expectations, as well as supply and demand.
“All of that tells me that, while I wouldn’t presume whether to judge the timing, the dominant probability would be by the end of next year we will be seeing a recession in the American economy,” Summers remarked.
The Daily Wire noted that Sunday was not the only time Summers had made such remarks, as Bloomberg reported that he made similar comments last month in an interview with the podcast “Stephanomics.”
“If you look at history, there has never been a moment when inflation was above 4% and unemployment was below 5% when we did not have a recession within the next two years,” Summers said.
“So I think the odds on a hard landing within the next two years are certainly better than half, and quite possibly two-thirds or more,” he added.
Summers predicted that “we’re not going to see disinflation back towards the target range until we see unemployment rise, meaningfully.”
Biden inflation plan called “non-serious and utterly ineffectual”
What’s more, Summers dismissed ideas that the Biden administration has put forward on how to address rising inflation, calling them “frivolous, non-serious and utterly ineffectual.”
“A gas price holiday would ultimately push up prices by raising demand,” he argued. “The student loan relief yesterday is injecting resources into the economy at a $100 billion a year annual rate when the economy needs to be cooled off, not heated up.”
Summers also took issue with how the administration has handled oil production, saying it “could be much more constructive than it has been with respect to energy supply.”