Former Harvard president talks fiscal cliff

Economist and former Harvard President Larry Summers spoke Wednesday about the future of the U.S. economy.
Economist and former Harvard President Larry Summers spoke Wednesday about the future of the U.S. economy. Photo by Joyce Xi.

In a talk entitled “Economic Possibilities for Our Children,” economist and former Harvard President Larry Summers spoke about how the nation must respond to the impending fiscal cliff.

Speaking before an audience of roughly 80 students and faculty in Sheffield Sterling Strathcona Hall on Wednesday evening, Summers discussed unequal growth in various sectors of the economy and the increasingly pressing issue of the fiscal cliff — a collection of automatic tax increases and spending cuts that could stifle growth if they to go into effect at the start of 2013. In addition to the fiscal cliff, Summers said America faces underlying economic and structural issues that must be resolved in order for long-term progress to be possible. During his lecture, Summers emphasized the need for President Barack Obama and Congress to come to an agreement on tax and budget policy, lest the nation slip into another recession.

“If we screw up, we’ll severely damage the economy,” he said. “But success [in resolving the fiscal cliff alone] won’t drive the economy forward or address its basic fiscal and structural imbalances.”

Summers called for an increase in spending on infrastructure to boost consumer demand, which he said will keep the nation fiscally afloat both in the coming months and in the long term. Infrastructure spending will bolster employment, Summers said, adding that the nation must continue to target unemployment given that a fifth of working-age men are currently without work.

Summers said Obama’s policy proposals — which advocate infrastructure spending and tax increases for the wealthy — will adequately address the fiscal cliff. He also discussed the growing income inequality in the United States, adding that the share of pre-tax income that belonged to the top 1 percent of the population had more than doubled from 7.8 percent in 1973 to 17.4 percent in 2010.

The economist also criticized elite universities like Harvard and Yale for not becoming more inclusive — which he described as a symptom of mounting financial inequality. He added that such universities are often seen as “exclusive clubs.”

Four students who attended the lecture said they found Summers’ speech to be incisive and informative.

Sandy Jin ’16, who said the lecture was insightful, added that Summers did not address American politics as much as he had expected.

“He’s rather optimistic about America’s future,” he said. “But he didn’t address the reality about the gridlock in Congress, or the difficulties the process has.”

Summers is currently the Charles W. Eliot University Professor at Harvard’s Kennedy School of Government.

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