Former US Treasury Secretary Summers said Congress overlooked an important tool that might help financial authorities in controlling inflation and urged them to consider raising taxes.
“Fiscal policy makes a big difference,” Summers said in Bloomberg Television. “The right thing to do is to raise taxes now and remove demand from the economy.”
However, he said that no tax increase should be used to finance new spending, stressing that it is different from the tax increase and social security spending expansion framework that President Biden has been asking Congress to understand for the past year or so.
Interview with Mr. Summers
Source: Bloomberg
“It’s not time to think of something like a new big spending program,” said Summers, a professor at Harvard University and a contributor to Bloomberg Television. He also said he should not take “stimulating” measures, such as continuing student loan repayment grace.
“Don’t let anyone argue with the basically ridiculous idea of the economy that tax increases induce inflation. That idea isn’t right at all,” he said.
Original title:Summers Says Raise Taxes ‘Right Now’ to Help Battle Inflation(excerpt)
