Joe Biden is failing so badly that even Democrats are issuing warnings about the consequences of his terrible policies. A top Democrat economist has warned that the size of Biden’s economic stimulus is causing the economy to “overheat,” saying that it may melt down very soon if the Democrats don’t start slowing down.
In an interview the PBS show “Firing Line with Margaret Hoover” on June 12, Larry Summers said that the Federal Reserve was “in the face of a housing market on fire,” and “intervening in the markets,” adding, “Seems like that’s adding gasoline.”
The warning from Summers, who held top economic positions under the presidencies of both Bill Clinton and Barack Obama, comes as jobs report numbers under Biden have been disastrous and inflation has skyrocketed.
“If you looked at how the economy was coming into this year, we had total wages and salaries coming to people were 20 or 30 billion dollars a month lower because many of them had to be home because of COVID and the economy was slowed,” the economist said. “But we put in a stimulus that was putting into the economy more than 200 billion dollars a month. And so when you take a hole and you overfill it, you’re likely to have problems. That started to manifest itself. It manifests itself in the fact that even though people say there’s high unemployment, the number of businesses with vacant jobs is higher than it’s ever been. Another indicator that economists use to kind of sort things out is how many people are quitting, because when times are really tight in the labor market, people feel like they can quit. So, on all these kinds of indicators, you’re seeing, it seems to me, some inflationary psychology take hold.”
“And I think we know that inflation’s like a lot of other things, it’s a lot easier to prevent than it is to cure,” Summers added. “And I think the credibility of policymakers, including those at the Fed, is much easier to preserve than it is to restore.”
According to Summers, Biden may be setting up the country “for bigger” economic problems “in the future.” He also noted that the main problem is that the administration is acting like the economy is in the same shape it was 6+ months ago, instead of facing the reality that it is potentially ‘overheating.’
“The main risk is that our economy’s going to overheat,” Summers said. “And then once it overheats, it’s going to be hard to put out the fire without doing a lot of damage and causing a lot of problems. And so I’d like to see us shift towards a policy concern. I mean, let me give you another example.”
“Okay,” Hoover responded.
“We’ve got houses, a housing market in an incredible place,” Summers continued. “For the first time since they started having these statistics, the majority of houses are selling above their asking price. Why in the face of a housing market on fire should the Fed be intervening in the markets to buy up mortgage-backed securities and subsidized mortgages? Seems like that’s adding gasoline.”
Summers even agreed with conservatives on the point that the extra unemployment benefits are a major cause of the crumbling economy, stating that it was “completely inappropriate” to continue to be providing “unemployment insurance on excessively generous terms where we’re giving people more money for not working than they would have earned working.”
Weeks prior to this interview, Summers was already sounding the alarm, saying that his concerns about the economy overheating “have grown substantially over the last several months.”
Of course, its unlikely that the Democrats will listen to these warnings. They are too busy making more plans to spend our tax dollars — and the tax dollars of future Americans that haven’t even been born yet — on their insane radical policies. The question is, are they trying to collapse the economy on purpose, or are they just so wrapped up in themselves that they can’t see the inevitable consequences of their actions?