Lawrence Summers warns of Trump's tax policy risks for US economy

Former US Treasury Secretary Lawrence Summers has expressed concern about the consequences of the Trump administration's tax policy. He believes the increase in national debt jeopardizes the country's position as the world's largest economy. The legislative changes, which include tax cuts, will lead to additional spending estimated at more than $4 trillion over a decade, according to Summers.

By increasing borrowing, the government is significantly raising the debt burden on the budget, Summers stated. Debt service costs have already reached a 28-year high. The situation is worsened by an aging population receiving social benefits and rising healthcare costs. With the budget deficit exceeding 6% of GDP, the government's ability to finance important development areas is limited.

Looking ahead, Summers predicts the deficit-to-GDP ratio will exceed 7%. This will constrain the government's ability to fund critical areas, such as scientific research, negatively impacting the country's long-term economic development.