February 21st, 2013
10:03 AM ET

Summers: U.S. needs growth strategy, urgently

"Fareed Zakaria GPS," Sundays at 10 a.m. and 1 p.m. ET on CNN

Fareed speaks with former U.S. Treasury Secretary Larry Summers about the state of the U.S. economy. To see this or other interviews, download the show at iTunes

What are the lessons you have learned about how you create jobs?

We've got to make the growth deficit a priority in just the way we've been making the fiscal deficit a priority, because the truth is, we are never going to resolve the fiscal deficit in any ultimate sense in an economy that's growing at 1 or 1.5 percent, or even 2 percent a year. We've got to move to a focus on the growth deficit. And if we do that, I think we'll be surprised at how rapidly we'll see improvement in the fiscal picture. And I think we'll see a variety of other...

Because extra tax revenue...

…because the extra tax revenues will come in, because there will be less need to pay unemployment insurance benefits. And I think we'll also be surprised at, as the economy starts to grow, businesses will be able to invest more in innovation. There’s a tendency, which I think is badly wrong, to argue that we need to stop focusing on the short run and we need to focus on the long run instead. I think when we put the focus on stopping stagnation and having America be a rapid escalator again, what we are doing is the policy that will best prepare us for the long run.

So what you're saying is that the whole effort of the conventional wisdom around Simpson-Bowles and around all those 10 year packages is really just wrong right now, and that the focus needs to be on this question of growth – getting the economy on an escape velocity, and then maybe looking at cuts.

Fareed, I believe that a healthy individual can walk and chew gum at the same time, and a healthy government can pay attention to long run deficit reduction, because, look, we do have to make those adjustments, and if we don't make those adjustments, we are exposing ourselves to substantial risks that we shouldn't. So I'm not here to say that long-run deficit reduction is unnecessary. I am here to say that it is wildly insufficient. That's why I put such urgency on having a growth strategy.

And it's not that we shouldn't be paying attention to the fiscal issues, it's that we should not be solely paying attention to the fiscal issues. And that's been my concern about too much of our economic debate.

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Topics: Economy • United States

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soundoff (8 Responses)
  1. raj

    Gwoth strategy will work only if there is less hurdles and more cooperation from the opposition. This is possible only if love for USA's progress is more important then self interest ideology to remain in power.

    February 21, 2013 at 10:48 am | Reply
  2. rightospeak

    Why didn't he have growth strategy ? To keep things in perspective , the only American president to pay off National Debt was Andrew Jackson. The current bankrupcy situation was created by both parties through lying , endless wars, welfare for the rich , offshoring of jobs, open borders. To have growth one needs to reverse what has been done : bring back offshored jobs, stop all wars and bring all troops home as Ron Paul suggested, spend money on infrastructure, close the border, stop drug trafficking which is detroying our youth. Above all, the media's Globalist propaganda and manipulating public opinion needs to stop-the American public should know the truth.

    February 21, 2013 at 10:57 am | Reply
  3. Hahahahahahaha

    Let me guess..........Here is the GOP solution.............wait for it.............almost here...........here it is: "TAX BREAKS FOR THE RICH!!!!" Wow. I bet you'd have never guessed THAT one!!! Hahahahahahahhaha

    February 21, 2013 at 4:21 pm | Reply
  4. Quigley

    This Larry Summers forgot to mention that we need to adopt a foreign policy of Isolationism. It worked quite well in the 1920's and will probably do it again, if only given the chance!

    February 21, 2013 at 7:07 pm | Reply
  5. Quigley is a moron

    Think about it, everybody trying to climb the muddy sides of the same pond. Things won't be changing anytime soon, the only thing that may cause some change is complete investment of the countries infrastructure, to put a lot of Americans back to work. The nay sayers will cry that the country can't go any further in the hole, but that's bull. Once real investment in infrastructure is under way then, invest in the children of the United States, by upping the ante on the educational system, its to backwards and has to be restructed so that all of the jobs in America can be filled by the next generation. The current education system was set up while farming was still the biggest industry in the country. World is changing faster and faster, America has to remain the world leader in order for its lifestyle to continue into the 21st and 22nd centuries. It isn't one mans job to see this succeed, it really is the nations. The sooner the powers that be realize this, the sooner the changes needed to prosper in the future are undertaken the better.

    Just a Thought

    February 21, 2013 at 10:56 pm | Reply
  6. j. von hettlingen

    Larry Summers was right about the Keynesian growth through spending, which has to be a myopic policy.

    February 22, 2013 at 6:44 am | Reply
    • j. von hettlingen

      History has shown that the success of those, who started this policy doesn't always pass on to their successors, who think, why change the policy while it works.

      February 22, 2013 at 6:47 am | Reply
  7. Mark

    USA cannot win, cannot succeed in growth strategy, unless: 1. More imports into NATO countries. 2. No more than necessary imports from non-Western Alliance countries. 3. more successful Public Relations. 4. Rely on Westen Union. 5. no non-Western oriented USA.

    February 23, 2013 at 7:28 am | Reply

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