The US dollar won't crash despite the economy's $16 trillion pandemic debt pile, economist Larry Summers says
US dollarwill not crash despite the $16 trillion debtpile that has built up because of the COVID-19pandemic, former Treasury secretary Larry Summerstold CNNon Sunday.
dollaris the world's safe haven. It's the place that money moves into when people get nervous about the state of the world," Summers said.
- While it is "right to worry" about the country's rising debt, a near-zero interest rate environment implies that the government can afford to borrow more, he pointed out.
- He also suggested that instead of lending money to credit-worthy corporations, the government should support unemployed and lower-income families.
The US dollar won't collapse despite the rising amount of
"The dollar is the world's safe haven. It's the place that money moves into when people get nervous about the state of the world," he said in an interview Sunday with CNN's Fareed Zakaria.The former World Bank economist said that as long as the US political system isn't disrupted, "the dollar's going to be okay."
But, according to him, a near-zero interest rate environment means credit is cheap and the government can afford to borrow more and pay back what it owes."The fact that we've got an interest rate that's essentially zero is telling us that the funds are available, and they're not going to crowd out anything important. Instead, they're going to push the
"The cost of incompetence here dwarfs the human cost of the Vietnam War in terms of fatalities that could have been avoided in terms of financial costs," Summers said.
Negotiations over a new set of stimulus measures are currently stalled, as Republicans and Democrats continue to wrangle over the details of the bill. House Speaker Nancy Pelosi on Sunday set a 48-hour deadline for Congress to reach an agreement on the upcoming plan.Read More: Buy these 7 unheralded stocks right now for near-term upside of at least 25% as growth accelerates to a new level, RBC says
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