The economy is no longer in free fall despite high unemployment
and speculation has shifted to when the recession will end from
worries about a depression, White House National Economic Council
Director Larry Summers said Sunday on NBC’s
”
Meet The Press.
”
Summers countered criticism that unemployment is rising despite
President Barack Obama’s efforts to stimulated the economy.
McClatchy News Service
SAN FRANCISCO
The economy is no longer in free fall despite high unemployment and speculation has shifted to when the recession will end from worries about a depression, White House National Economic Council Director Larry Summers said Sunday on NBC’s “Meet The Press.”
Summers countered criticism that unemployment is rising despite President Barack Obama’s efforts to stimulated the economy.
“We didn’t know how bad it was last winter,” Summers said. “That’s what we’ve learned from the data revision. Because we didn’t know how bad it was, unemployment is high. That does not speak to the efficacy, the extra impact that we’ve gotten from the administration’s program.”
Higher-than-expected unemployment is the result of businesses reacting to the worsening economy rather than failed stimulus efforts, Summers said.
“It’s higher than almost anyone forecast at the beginning of the year; and it’s higher because, frankly, what we inherited was much worse,” Summers said on the program. “It turned out that businesses were even more scared than we realized; and, therefore, relative to past recessions, as demand for their products declined, they were much quicker to lay people off than they, than they have been.”
Going forward, health-care reform will be a key economic fix given how much of the federal budget health care represents and its high cost to American businesses, Summers said.
“You know, for some of the automobile companies, the health insurance companies are actually their largest supplier,” Summers said. “And it’s essential to slow the growth of health costs if American families are going to see rising wages that rise ahead of inflation. So it is essential.”
