Budget deficits a second order problem- Summers

By IVCPOST Staff Reporter

Oct 19, 2013 10:48 AM EDT

In an article published in Reuters, American economist Lawrence Summers said budget deficits were a secondary problem to that of other issues faced by the American economy. He wrote that the debates in the crisis only had a minor relevance to the difficulties and opportunities the US is currently facing. Summers was referring to talks about debt limit extensions, the reduction of the medical device tax,and the proposals to alter the healthcare packages of the Congressional staff.

Summers wrote that there was still a high level of uncertainty about projections of a major deficit problem. He said the policy community was obsessed with making budget deals when it was better in economic and political terms to focus on addressing indirect issues about growth.

Summers added, "If even half the energy that has been devoted over the last five years to "budget deals" were devoted instead to "growth strategies" we could enjoy sounder government finances and a restoration of the power of the American example. At a time when the majority of the U.S. thinks that the country is moving in the wrong direction, and family incomes have been stagnant, a reduction in political fighting is not enough - we have to start focusing on the issues that are actually most important."

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