Economists surveyed by Bloomberg expect gross domestic product to expand at a 2.9 percent pace in 2014, faster than last year’s 1.9 percent growth rate.
“Around the consensus forecast of about 3 percent, the risks are pretty symmetric,” Summers told CNN.
Summers, who was treasury secretary under former President Bill Clinton, also said the U.S. “would be doing much better if more of the spur to economic growth was coming from the side of government spending or tax reduction rather than relying on the monetary and liquidity tools.
My opinion: A forecast of 3 percent GDP growth is a considerable increase from 2013’s 1.9 percent growth. It is important to note as well that this forecast takes into account the continued Fed taper which is a great boost to my confidence that recession statistics are soon to be history.
I will say though that I like Summers’ recommendation about more fiscal stimulus especially (as he notes) with interest rates at historic lows. Of course, a big issue with fiscal stimulus is the politics attached to the policy and the uncertainty of potential ill-conceived content that is usually attached to large spending bills. Government spending seems to always be a ‘buyer beware’ request.