Two of President-elect Barack Obama's top economic advisers said the US economy needs a substantial stimulus package to avoid a deep recession.
Former Treasury Secretary Larry Summers, who is being mentioned as a front-runner for the same job in the Obama administration, said yesterday that the depth of the current economic crisis underscored the need for a stimulus package that would be "speedy, substantial and sustained" over a period of two to three years.
Robert Rubin, another former Treasury Secretary in the Clinton administration, agreed that whatever package Obama puts forward next year would be large.
He said a sizable package would provide a "strong probability" that the current economic crisis "will abate within a reasonable period of time", although he refused to be pinned down on how long that would be.
Summers and Rubin both spoke at a business conference sponsored by the Wall Street Journal, appearing on the same panel with current Treasury Secretary Henry Paulson.
Summers, who stressed he was providing his own views and not necessarily those of the Obama team, said that the seriousness of the crisis had convinced him that a sizable stimulus package was needed.
He did not offer his own estimate of how big the package should be, but noted that economists at Goldman Sachs had suggested the effort should be in the range of $500 billion to $700 billion, much larger than the figures being used so far by Democrats in Congress.
He said the effort should be aimed at keeping the country from "just lurching into a downdraft and a vicious cycle" in which economic weakness feeds on itself.
