Harvard University professor Lawrence Summers told delegates at the World Economic Forum in Davos on Wednesday that the United States was right to focus on reducing its budget deficit, but that it should also make the most of "negligible" long term interest rates to improve the country's healthcare and education systems.
The United States is on track to hit a borrowing limit of $16.4 trillion between mid-February and early March, and economists have warned that hitting the debt ceiling could hurt the U.S. economy.
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"People have counted the United States out before…And I think people make that mistake now with respect to our economy and with respect to our politics. I think if we seize the moment we have huge and unique opportunities in the world," said Summers, who served as U.S. Treasury Secretary from 1999 to 2001 under President Bill Clinton.
He was Director of the White House U.S National Economic Council for President Obama until November 2010. Summers also served as Harvard University president from 2001 to 2006.
"This is a moment for broad renewal that corrects all the deficits that we have. Yes, we must put our finances on a sustainable basis over the next several years. But the budget deficit is not our only deficit," he said.
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"If a moment when the Federal Government can borrow money at negative 75 basis points in real terms for 10 years and construction unemployment is well into double digits is not the moment to do something about it, I don't know when that moment will be."
Summers said this was the moment to renew the country's healthcare and education systems.
"This is the moment when we gave a profound deficit with respect to the way in which we are providing opportunity to children in the lower half of the population who are falling further behind in terms of education," he said. "This is the moment when we can correct that deficit."
With greater focus on the future, this could be a "profoundly important" moment for the United States and its role in the world, he said.