WATCH: Biden ally Larry Summers comes out against $2k stimulus checks, explains his reason

Former U.S. treasury secretary Larry Summers, a Biden ally who reportedly advised his campaign, has come out against $2k stimulus checks.

WATCH:

Summers explained his rationale via a series of tweets:

He wrote Sunday:

The question is whether spending $600B on a tax credit that reaches more than 85% of taxpayers makes good economic sense.

I believe it does not.

Data striking: employee compensation now only above $30B/mnth behind pre-COVID baseline. Relief bill will replace it 7x over.

This figure shows that the $2,000 tax credit would take household income relative to the economy’s potential size into territory never seen before with an economy anywhere near normal.

Summers added:

To those who say $2,000 checks not optimal, but better than nothing: what is limiting principle? How about $10,000 checks? More?

Hard to justify support for near-universal giveaways when income losses fully replaced, w/ no liquidity problem for most.

Dems seizing this opportunity to pit Trump and McConnell against each other is fair and good politics. But if implemented, is bad economics.

@realDonaldTrump must immediately sign stimulus that took months to negotiate to avoid cutting off UI and pushing millions into poverty.