Speaking on Wall Street Week, Larry Summers said that budget deficits are not much more serious than in the early 1990’s. Summers noted that government debt then was about 30% of GDP, while now it is above 100%
Noted that deficits are now likely to be 10% of GDP, and that there are likely to be many reasons that government spending will increase, including defense and climate change.
Concerned about China’s growth prospects, noting that consumption in China remains low, and that there appears to be over-investment, which “is a precursor to bad debt.”
