Former Treasury Secretary Larry Summers sees caution lights ahead for the economy, and believes infrastructure spending could help get the engines of commerce moving again.
In an interview with The Washington Post
, Summers said that now is the time for investment in public infrastructure. He was also not above hinting at disapproval of the Federal Reserve's ultra-loose economic policies.
"What we need is a focused growth strategy that recognizes the importance of generating healthy demand rather than a strategy that either accepts the lack of demand or tries to generate demand by driving down interest rates beyond extraordinary lows," he explained.
Summers said new U.S. infrastructure spending should include energy pipelines, and the proposed Keystone XL pipeline in particular — not exactly a project embraced by his former boss, President Obama.
"I suspect we should do the Keystone pipeline if it is still the relevant pipeline — which is very much in doubt.," he said, apparently referring to the recent Senate vote to shelve the project. "We certainly should not stand in the way of the Keystone pipeline. We should be trying to use this moment to maximize use of our energy resources."
Summers also told The Post he would be in favor of lifting the decades-old restrictions on energy exports, building up U.S. port capacity and updating the nation's antiquated air traffic control system.
"There is an enormous amount of work that needs doing," Summers said, to "put people to work in the short run and raise the efficiency of the economy in the medium and the long run."
In his view, with Europe stagnant, China slowing down and Japan, Russia and Brazil already in recession, the U.S. should ignore the national debt and take advantage of abnormally low interest rates to borrow and spend on infrastructure investments.
An analysis by U.S. News & World Report
concluded that successful infrastructure investment in the country likely depends on public-private partnerships.
"Infrastructure, in particular, is a problem both parties want to fix. This bipartisanship is understandable — according to the American Society of Civil Engineers, it's a $3.6 trillion problem that's hard to ignore when stuck in traffic because of road closures," U.S. News reported.
"Voters realize that how to pay for these fixes is always a source of partisanship. The private sector can and will step in, but Congress, working with lawmakers at the state level, needs to make sure private investment is a permanent part of any solution."
U.S. news noted Standard & Poor's has concluded that strapped government budgets, lower consumer spending and tepid economic growth might be permanent features of the American economy now, which could necessitate turning to private industry to help finance public works projects.
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