Summers Sunny On Economy

001221_Lawrence Summers
Of a possible recession, President-elect George W. Bush said Thursday "there are warning signs on the horizon." The Clinton Administration has taken issue with the gloomy outlook of the economy by the in-coming administration. CBS News Anchor Dan Rather interviewed a member of the Clinton team, Treasury Secretary Lawrence Summers, about the health of the economy and about suggestions of a recession.

RATHER: Is it smart politics to be talking about a recession at this stage?

SUMMERS: Well, that's a judgment for others to make. I think what's important is to try to focus on the underlying realities. The consensus forecast continues to be for moderate growth in the 3 percent range over the next four quarters. We'll have to see how economic conditions evolve, but I think it's a mistake to lose sight of some very strong fundamentals.

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More on economic worries from

Click here to read CBS News Business Correspondent Anthony Mason's report on the stock markets' holiday gloom.

Click here to read CBS News Correspondent Richard Schlesinger's report on how consumers' worries are in turn worrying shopkeepers.

Or here to read about the fallout over President-elect Bush's pessimistic outlook on the economy.

RATHER: To those who say, 'Look, I understand why you and the president have had a policy of paying down the national debt. But now maybe it's time to have a big sweeping tax cut, just to insure our economy keeps booming along.' Have you reached the point where you agree with that or you still disagree with that?

SUMMERS: What I think we've learned very powerfully over the last eight years is that the anticipation of what's going to happen in the future and future policies can have an enormous impact on market confidence, which in turn effects the economy today. My hope would be that that forward-looking element would play a crucial role in policy-making as adjustments are made to whatever conditions may come.

RATHER: What is the single most important thing you want the American people to know tonight as they try to consider where we are economically?

SUMMERS: That the American economy is in good shape at the end of this decade — the decadthat began with people joking about how the Cold War was over and Germany and Japan had won. A decade that began with people thinking we were going to have 6 percent inflation and 7 percent unemployment is ending with record low inflation and record low unemployment and in record productivity growth. That is a tribute to their hard work and initiative. And what they have to look to Washington for in the future and in the past is policies that support that initiative and that allow the tremendous energy that this economy has to carry it forward.

RATHER: Secretary Summers, thank you very much.

SUMMERS: Thank you, Dan.

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