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Summers: U.S. government should spend ‘whatever it takes’ to control virus

Former Treasury Secretary Lawrence Summers has deep experience in economic policy. On Wednesday, he was among a bipartisan group of economic experts urging U.S. officials to prioritize resolving the pandemic’s medical emergency before trying to rectify its economic fallout. Summers joins Judy Woodruff to discuss direct payments to Americans, funding hospitals and the need for consistent strategy.

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  • Judy Woodruff:

    So, let's talk some more about that financial rescue plan, what it does, what it might be left to do.

    And we turn to someone with deep experience in economic policy. He is Lawrence Summers. He served as secretary of the Treasury under President Clinton. And he was director of the National Economic Council during the Obama administration. He's currently a professor of economics at Harvard University.

    Yesterday, he joined a bipartisan group of 34 former secretaries of the Treasury, Federal Reserve governors, economic scholars who signed a statement making the case to officials that the best way to address the economic fallout of the coronavirus was to first attend the medical emergency.

    Larry Summers, thank you so much for joining us.

    It's so hard the hear these stories.

    And I want to ask you first about these unemployment claims today, 3.3 million people. How much worse could this get?

  • Lawrence Summers:

    Julie — Judy, we're at war with this virus.

    And you showed some of the casualties of that war. And that's not a war that's going to end soon. There will be millions more people who will be filing for unemployment insurance and who will lose their jobs.

    Fortunately, that $2.2 trillion is direct — providing as big and broad a safety net as we can at this point. That's a lot of money and it will do a lot of good, but I'm sure it's not going to be the end of the things we do to keep our economy going and to maintain our economic system.

  • Judy Woodruff:

    And that's what I want to…

  • Lawrence Summers:

    But what's crucial in a war like this — and that's what the letter I signed refers to — is that we do it with a strategy to win as rapidly as possible.

    And that means we can't abandon the war too early, because, if we do, we will lose any ground we have gained, and we will have that much longer a struggle. And that's why we're going to have to see through this period, until there's enough progress that public health authorities tell us that we can let up on this current period of painful social isolation.

  • Judy Woodruff:

    And we read — we understand the letter directed, at least in part, to President Trump, who has been talking about opening up businesses soon, within weeks, wherever the virus stands, at the same time targeting the virus.

    But, Larry Summers, let's talk about what more needs to be done. there are people who are saying this relief is great, and this $2.2 trillion bill, but it is going to only last — we just heard Lisa Desjardins say — eight weeks in some instances.

    What is the most powerful thing that can be done in addition to this? Is it more cash directly to individuals? Is it loans to small business? What exactly is it?

  • Lawrence Summers:

    All of the above, Judy.

    I think the highest priority right now would be to add enough money for state and local governments, for mayors to take care of their people. That's the first priority.

    Second priority is, we have got to be on a wartime footing with respect to getting tests, with respect to getting protective equipment, with respect to getting ventilators to take care of people.

    And we need to spend whatever it takes. We need to use whatever authorities the government has to deliver the resources, so that we can target people, get the assistance to the people who need it, be secure in the knowledge that we're identifying the people who are victims, and also recognizing the people for whom it is safe to go out and go back to work again.

    Make no mistake, no matter how much money the Federal Reserve commits, no matter how big a budget deficit we run, we cannot solve this problem until we contain the virus.

    And that's why a careful, strategic, determined strategy of the kind that Dr. Fauci is pushing is what we need. But, above all, in a war — and that's what we're in — you have to be steadfast, you have to be moving forward in a consistent direction, and you not have — we have to not change course every few days.

    And that's why the president's talk about Easter, about 15 days, is so potentially dangerous and destabilizing.

  • Judy Woodruff:

    So, it sounds like you're saying not enough money is being pushed in that direction right now for testing, for research, not enough priority in that direction.

    But I'm hearing you say, yes, we need a lot more money on the medical side. At the same time, we shore up individual people's lives. When you hear mothers with children with special needs, a man says, I don't know if I can meet my rent this month, people are hurting, and panicking in some instances, right now.

  • Lawrence Summers:

    This is probably the most profound test of American society since Pearl Harbor, whether we can manage the resources to contain the virus and at the same time protect and maintain the most vulnerable among us as a society.

    It's a test of our competence. It's a test of our compassion. It's a test of our will. I think, ultimately, we will meet it, but, certainly, there have been some false starts, although there have also been some encouraging signs, the speed with which Congress was able to pass this massive legislation, the way the Fed has been able to step in and address the financial problems.

    But the really important thing is the strength of our efforts around addressing the disease and protecting its victims. That's what history is going to judge us on.

  • Judy Woodruff:

    Former Treasury Secretary Larry Summers, thank you very much.

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