US Economy Remains in 'Recovery Phase': Summers

The U.S. economy continues to be in a 'recovery phase', Lawrence Summers, the former director of the National Economic Council under President Obama, told CNBC Monday.

Getty Images U.S. National Economic Council Chairman Larry Summers

"We definitely hit a slower patch, but I think the basic fact that the terrible financial strains we had are abating, remains in place, and I expect this recovery to continue for a substantial period of time," Summers said.

"It [economy] will be accelerating before too terribly long," he added. "It's not going to be the kind of growth we've seen at other moments, the kind of 6- or- 7 percent growth that you saw in the aftermath of the 1982 recession."

But Summers, currently a professor at Harvard University, pointed out that the unemployment rate is a  concern. "It's a good idea to take a broader perspective: on one hand we are right to be very concerned about joblessness. On the other hand, if you looked two years after the trough of this most recent recession the economy created well over a million, close to two million jobs."

In addition, he went on to say "there has been a debate for some time as to which is the most serious risk to our prosperity: the risk that we'll make the mistakes of the 1970s and over stimulate, create inflation and end with stagnation; or that we'll make the mistake that Japan made in the 1990's; or the mistakes that the United States made in 1937 and declare recovery well established prematurely and end up with a period of being too stagnate for too long."

The latter is the greatest risk, added Summers. "Policy does need to be above all vigilant to make sure that recovery is well established."

Lastly, he can't "conceive" that the debt ceiling won't be extended. If policy makers in Washington allowed the country to default it would be "catastrophic."

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