Former Treasury Secretary Larry Summers warned Wednesday that a second Trump administration could destroy the U.S. economy, predicting an “inflationary spiral.”
“I don’t think it’s just massive deregulation,” Summers said. Speaking at a Semaphore event Wednesday. “I think that would result in massive regulation in the form of restrictions on purchasing products from overseas, which would drive up prices and create an inflationary spiral.”
Mr. Summers explained that President Trump’s populist economic policies could undermine the independence of the Federal Reserve, leading to the risk of higher inflation and increased spending.
“Look, there’s a model of populism. It’s the way most countries in Latin America have operated for most of the time, since World War II,” he said. “It has not been a notable financial success, to say the least.”
He likened the situation to Argentina in the 1950s, an economic collapse that caused social unrest, and warned that President Trump’s policies could lead to hyperinflation.
“I’ve been working on this as a kind of adult through about a dozen presidential elections, and I’ve always wanted one side to win,” he said. “But until this time, I never thought that this was a big problem for the next generation with one-sided aspects.”
“And I really think so. I think Argentina is a good analogy,” he continued. “There is one crucial difference: World order never rested on Argentina. World order rests on the United States.”
Summers, an economist who worked in the Clinton and Obama administrations, has repeatedly urged voters to vote against Trump. He warned in January that November’s election was likely to be the “most consequential” election since World War II.
The Hill has reached out to the Trump campaign for response to Summers.
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