Former Treasury Secretary Summers says the quiet part out loud: IRS must collect more taxes

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Former Treasury Secretary Larry Summers believes that the current federal budget deficit poses a greater challenge for the economy than it has before in U.S. history.

Summers said Tuesday during an event staged by the Center for American Progress, a Democratic Party-aligned think tank, that the U.S. budget deficit, which came in at $1.7 trillion in 2023, “is probably a more serious problem than it ever has before.”

Summers discussed the issue of IRS enforcement of tax laws, an issue that he said was of increasing importance when the fiscal deficit remains so high.

The budget deficit is large not only in absolute terms, but also relative to the size of the U.S. economy. The 2023 shortfall came in at 5.3% of GDP, well above the average 3.8% seen over the past 40 years, according to data from the Office of Management and Budget.

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Summers compared the current situation unfavorably to what former President Clinton dealt with in the early 1990s, when Summers served as Treasury Secretary and the administration pushed through a deal to trim the deficit with tax increases and spending cuts and during President Obama’s first term, when he attempted to reduce the deficit through a combination of tax increases and reforms to Social Security, Medicare and Medicaid.

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