Donald Trump's plans to slash taxes and retract oversight of the financial industry risk triggering another economic crisis and crippling the country “for a generation,” warns Former Clinton Treasury Secretary Larry Summers.
"The idea that we would repeal Dodd-Frank" -- the landmark financial reform legislation passed in the wake of the 2008 economic crisis -- "I think that would be a catastrophic kind of error," Summers recently told David Axelrod on CNN's "The Axe Files" podcast.
Totally gutting the 2010 law is a "very, very scary" notion that "would be taking immense and systemic risks of another financial crisis," said Summers, who served as President Clinton's treasury secretary and President Barack Obama's National Economic Council director.
"What I'm worried about is that we're going to do tax cuts that are going to cripple government for a generation," said Summers, now a Harvard professor. For example, he said if Trump repeals the estate tax, the wealthiest Americans would then protect those savings in family trusts.
Summers predicts the country's biggest challenge putting people back to work. "I think that finding work for everyone is going to be the central challenge of our politics over the next generation," Summers said. "I think the government is going to have to take a much larger role in assuring that everybody's prepared for work," Summers said.
However, other respected economic gurus are voicing a bit more faith in Trump's presidential potential.
CNBC's Jim Cramer said the post-election stock-market rally can be directly attributed to Trump 's vows coming to fruition.
"This is a remarkable rally because it's based on everything that this guy says — like anything that Trump said is going to come true." Cramer said told CNBC. "And I think that's because people just feel like the Republican Party's going to fall in line."
Major U.S. equity indexes have spiked since Trump's victory over Hillary Clinton in the Nov. 8 election. The Russell 2000 has notched its longest daily winning streak since 1996.
Cramer said some economists predict the Trump rally won't last much longer — but he took a more optimistic view, saying economists need a more solid reason for why it won't last, CNBC reported.
"Everybody said two things. One is, this Trump rally can't last. And second, when I ask why not, they say, I don't know. It can't last," he said. "You need something which says it can't last because of 'X.'"
"I don't think it is over. It is just morphing into other areas not yet picked over, which is what happens when much of the S&P 500 has jaunted higher and the Russell 2000 … goes up for an astounding 2 weeks in a row," the "Mad Money" host said.
(Newsmax wire services contributed to this report).
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