Commentary | Economic Growth

Summers delivers final public address at EPI

Speaking at the Economic Policy Institute, where he delivered his final public address before stepping down as President Obama’s top economic advisor, Larry Summers said that the public sector played a crucial role in the country’s short-term and sustained economic health, both by providing the investment to offset a severe slowdown in private spending, and by creating the conditions by which a private sector could thrive over time.

“Had it not been for a willingness to support an aggressive response to the financial crisis of 2008,” he said, “I have little doubt that we would be looking at a vastly different world today.”

Referring to a still fragile economy, the ongoing jobs crisis, and particularly high rates of unemployment in the construction sector, Summers said, “What better time to invest in upgrading and renewing our nation’s infrastructure….A substantial, sustained effort to rebuild American should be at the top of Washington’s agenda.”

And he said that while private sector innovation was essential to future growth and competitiveness, much of that innovation could not happen without the support of the public sector. He noted there would be no Internet without the technology that had initially been developed for the U.S. military, no car industry without a national network of roads and highways, and no pharmaceutical revolution without the National Institutes of Health.

In a speech that also stressed the importance of long-term fiscal responsibility and increased demand, Summers said that the deal last week to extend Bush-era tax cuts for the country’s top earners had been a “compromise.” But he added that “compromises that were necessitated by a weakened economy in 2010 should be inconceivable in 2012.”

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