In a matter of days, investor relief that the United States avoided default has been replaced by fears Europe’s debt crisis is deepening and the world’s biggest economy may be slipping back into recession.
“The odds of the economy going back into recession are at least one in three if nothing new is done to raise demand and spur growth,” Summers said of the United States in his column.
The bellwether S&P 500 index dropped more than 2.5% on Tuesday to wipe out 2011 gains after data showed U.S. consumer spending fell in June for the first time in nearly two years.
Insight: Debt relief replaced with recession fear | Reuters.