Larry Summers, the former US Treasury secretary, on Wednesday called for a fiscal stimulus of up to $75bn to support the US economy, as fellow Democrat Chuck Schumer launched a scathing attack on the Bush administration’s handling of the subprime crisis.

Mr Summers said the stimulus was necessary to offset the mounting risk of recession. He warned that, without timely action, the average US family could lose up to $5,000 in income, the country could suffer hundreds of thousands more home foreclosures and national debt could significantly increase - “even in a mild recession”.