Lawrence Summers, the former Harvard president who is now a top economic adviser to President Obama, talked up Obama's stimulus package today, but also reminded of the crisis that he inherited.
"Youíll see the effects begin almost immediately," Summers said on CNN. "Layoffs that otherwise wouldíve happened in cities and towns of cops and teachers wonít happen. Youíll see withholding schedules adjusted so that people have more money in their paychecks. Youíll see orders go out for new roads, new bridges, new computers for hospitals. Youíll start to see better maintenance of schools. So, things will happen very, very quickly."
He quickly added that "the president inherited a very, very difficult situation. A trillion dollar deficit, an economy that, frankly, was in freefall. And so, while there will be clear impacts of this package that one will see almost immediately, weíve inherited an economy that was programmed for substantial decline before the president got here."
Asked when the economy would start to turn around with job gains instead of losses, Summers replied: "Thereís one thing Iím certain of: that day will come much sooner with the presidentís program then it will come without the presidentís program. But Iím not going to hold out for you the prospect that it is imminent. Perhaps it will be towards the end of the year, perhaps it will be early next year. Perhaps, if confidence takes hold quickly, it will be somewhat sooner.
"But the situation that weíve inherited is a very, very difficult one and so the first step for policy has to be containing the damage, limiting the downturn, laying a foundation from which growth can resume. Thatís why the economic recovery program is so important. Thatís why it has to be complemented with a financial recovery program as well. Because, you know, a weak economy hurts the financial system, a weak financial system hurts the economy, and youíve got to intervene in both ways. And thatís what the presidentís going to do."
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Glen Johnson is Politics Editor at boston.com and lead blogger for "Political Intelligence." He moved to Massachusetts in the fourth grade, and has covered local, state, and national politics for over 25 years. E-mail him at firstname.lastname@example.org. Follow him on Twitter @globeglen.