"Leading US Economists United in Opposition to $2,000 Cash Payments"

Sharp Criticism from Former Treasury Secretary Summers and National Economic Council Chair at the American Economic Association
Opposition to Biden's Additional Cash Payments
"Fiscal Spending Should Focus on COVID Control and Racial Discrimination Resolution"
Republican Professor John Taylor Also Agrees

[Asia Economy New York=Correspondent Baek Jong-min] He was serious. It seemed as if he had made up his mind. It was not the indifferent demeanor he usually showed at academic conferences.

Professor Lawrence Summers (yellow line) of Harvard University is presenting at the American Economic Association. The session included Carmen Reinhart, World Bank economist; James Taylor, Stanford University professor; Raghuram Rajan, University of Chicago professor; and Joseph Stiglitz, Columbia University professor.

This is the story of economist Lawrence Summers, a Harvard professor who served as Chairman of the National Economic Council (NEC) and Secretary of the Treasury during the Clinton and Obama administrations.

On the 4th (local time), Professor Summers, attending the American Economic Association conference held via video conference, strongly criticized the $2,000 cash payment plan pushed by the political sphere. He openly opposed President Trump's populism and the Biden administration's forthcoming generous support policies.

A leading economic brain affiliated with the Democratic Party directly rebutted the $2,000 cash payment plan promoted by President-elect Biden and the Democratic Party.

Professor Summers, who was once considered a candidate for Chairman of the Federal Reserve, the U.S. central bank, assessed at the end of last year that it was good news that the $2,000 cash payment bill was not passed by the U.S. Congress.

He argued, "It is unclear what problems can be solved by a measure that benefits 94% of the entire U.S. population."

Professor Summers even used graphs to support his argument. Unlike his usual indifferent expression at conferences without data, he showed a sense of proactiveness.

He explained that, considering the current economic situation, Americans' disposable income is about 15% higher. This means that Americans have income available to spend but are not consuming.

He added, "Increasing stimulus measures will not lead to spending increasing as much as expected."

Professor Summers has consistently argued that President Donald Trump's opposition to the $900 billion stimulus bill while advocating for the $2,000 cash payment is a "serious mistake."

His stance contrasts with that of President-elect Joe Biden, the Democratic leadership, and the progressive wing of the Democratic Party. The Democrats immediately welcomed President Trump's $2,000 payment proposal and pushed for its legislation.

Professor Summers emphasized, "It is important to implement measures to suppress COVID-19 and reduce racial disparities and macroeconomic hardships."

At the conference that day, bipartisan consensus was also reached opposing the $2,000 payment. John Taylor, a Stanford professor who was considered for Fed Chairman during the Trump administration, supported Professor Summers' argument. Professor Taylor is a legendary economist who proposed the "Taylor Rule," which suggests that central banks should set interest rates considering inflation and growth rates.

Professor Taylor explained, "The $2,000 cash payment does not solve the problems that caused the current recession."

He continued, "Economic policymakers need to consider the rapidly increased U.S. debt level in response to COVID-19." He blocked the government's attempt to issue debt to provide cash payments. The fiscal spending planned by the U.S. to respond to the COVID-19 recession amounts to $3.7 trillion (about 4,000 trillion won). This burden ultimately falls on the government.

Professor Taylor advised, "We need to find ways to support private sector growth without resorting to fiscal policy."

This content was produced with the assistance of AI translation services.