Americans may need to get used to the idea that government will make up a bigger part of our economy in the future, former treasury secretary and Obama economic advisor Larry Summers said today at the Washington Ideas Forum.
At least, they do if they want to keep living in the sort of country they've gotten used to.
Summers tried to offer a dose of realism to the debate over debt reduction and the fast-approaching fiscal cliff, the massive package of tax hikes and spending cuts scheduled to kick in at the end of the year that economists, including Summers, say will plunge the economy back into a recession. Summers argued, as many have, that the final deal the president strikes with Republicans needs to address our long-term debt problems without imperiling the near-term health of the recovery. But he said that policy makers who want to pare government spending back so that it makes up the same portion of the economy it has in past decades -- say, around 20 percent -- are ignoring the hard truth about the ways the world has changed.