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Paul Volcker: Bailout “Distasteful” but Necessary
News
October 14, 2008
Author: Paul Volcker, International Council Member, Belfer Center for Science and International Affairs
Paul Volcker, speaking at a lecture in Singapore, said the U.S. economy faces a "considerable recession." Below are a summary of his comments from Bloomberg News and the Wall Street Journal. Volcker is a member of the Belfer Center's International Council. Read the full article here.
On the bailout:
- The bailout is "distasteful" and "not consistent with a capitalistic system" -- but "however distasteful, they are necessary to restore stability to the financial system."
- The bailout will help turn an "inevitable recession into something more manageable and that will last not too long."
On the economy:
- The U.S. and Europe face a "considerable recession."
- The global financial system is in "intensive care."
- "A strong recovery is beyond any reasonable expectation...a bigger [budget] deficit [is needed] to save the economy."
On the need for stimulus:
- "There is a need for stimulus measures on the budgetary front" to combat the recession..."A higher deficit is needed."
On inflation:
- "Inflation is not going to be a problem in the short run....But it's something we do have to guard against when we get out of the recession."
For more information about this publication please contact the Belfer Center Communications Office at 617-495-9858.
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