Administration Facing Important Fiscal Decisions, Says Larry Summers

By Miles Wolf Tamboli-Talk Radio News Service

National Economic Council Director Lawrence Summers spoke positively Monday about America's economic situation, but warned that the U.S. is not in the clear yet.

"The fiscal policy choices the United States makes over the next several years will be as consequential as any we have made in a very long time," said Summers, emphasizing the importance of the decisions the Obama administration will be making and has been making since 2008.

Summers attributed much of the recent economic growth to the administration's Recovery Act, stating that, "the combination of tax cuts, emergency support for the newly unemployed, fiscal support for states and a range of catalyzing investments from infrastructure to energy have played their intended role."

Citing estimates by the Federal Budget Office, Summers then stressed the role of redefining health care in economic recovery. According to Summers, health care costs constituted 18% of our national GDP this year; twice the percentage of 1980. This figure is expected to expand to one third of our GDP by 2040, which would explain Summers' support of new health care legislation; "It is for these reasons that the president believed and acted on the conviction that reforming our health insurance system had to be the top priority in renewing our national economy"

Summers expounded that, although he believes the Obama administration acted prudently and prospectively, he warned against over-confidence; "The depression scenario that appeared a very real threat a year ago now appears remote. Yet ... [despite] growing signs of recovery, for millions of Americans the economic emergency grinds on."

NYC Mayor Says America Needs More Immigrants, Not Less

By Benny Martinez - University of New Mexico / Talk Radio News Service

New York City Mayor Michael Bloomberg said that the United States needs more immigration in order to stabilize an otherwise faltering economy.

Moderated by PBS host Charlie Rose, Bloomberg and Director of National Economic Council Lawrence Summers spoke Friday about the future of America’s economy and its relatively high unemployment rate.

“We need more immigrants, not less,” said Bloomberg. “They work very hard [and] they’re very entrepreneurial."

New York City’s mayor added that entrepreneurship is a crucial component in increasing the rate at which the Gross Domestic Product (GDP) grows and unemployment rate decreases.

To tap into this factor, Bloomberg suggested that Congress could grant green cards to immigrants from across the world who want to come to America to start businesses. In his theory, these prospective entrepreneurs would be permitted to keep their green cards indefinitely as long as they employ at least ten people. Bloomberg said that these initiatives would help boost the GDP and simultaneously reduce the unemployment rate.

Along with Bloomberg’s suggestions, Summers emphasized that increased access to quality education plays a role in creating job opportunities for future generations.

In today’s educational system, Summers said, “the dumbest rich kids are more likely to go to college than the smartest poor kids.”

The duo both agreed that the current financial reform bill encompasses what is necessary to get the economy back on its feet.

“The American Economy Is Again Progressing,” Says President’s Economic Advisor

By Mariko Lamb-Talk Radio News Service

Lawrence Summers, Director of the National Economic Council and Assistant to the President for Economic Policy, discussed the progress that the Obama administration has made thus far in economic recovery and voiced his confidence that the U.S. will be able to overcome the current economic challenges.

“Substantial progress has been made in rescuing the economy from the risk of economic collapse that looked all too real six months ago,” Summers said.

He reported that “many private forecasters expect to see positive growth in the second half of this year.” Additionally, reports have indicated improved consumer and business sentiment, a 33% decrease in investment grade corporate bonds, and a slower pace of GDP contraction.

A slight pause in Summers’ optimism ensued upon the mention of the high unemployment rate facing the U.S. “Unemployment is substantially higher and job loss has been greater than most observers predicted last winter...unemployment is likely to rise in coming months,” he admitted.

He claimed, however, that although the high unemployment rate is a significant problem, it “does not provide a basis for concluding that the Recovery Act is falling short of its goals.” He advised Americans to be patient since the “peak impact of the stimulus on jobs” is not projected to be achieved until the end of this year.

"While unemployment continues to contract, the available indicators suggest that GDP is on close to a level path with prospects for positive growth to commence during this year,” Summers concluded.