(MONEY Magazine) – Reasonable people will argue for decades about Bill Clinton and how much credit he deserves for the longest economic expansion in U.S. history. Reasonable people will not, however, dispute the notion that Clinton's economic team was led by some of the best practitioners of the dismal science.

Yes, Alan Greenspan was a Reagan appointee, but Clinton had the good sense to renominate him--twice. Robert Rubin has been called the best Treasury Secretary since Alexander Hamilton. And then there is Lawrence Summers, Rubin's longtime deputy and now his successor. Summers' ascension last year to the top Treasury job comes late in the Clinton era, but the power of the post automatically makes him a player, with a say in everything from the next federal budget to China's entry into the World Trade Organization.

Brilliant and driven--he was the youngest economist to get tenure at Harvard--Summers has been criticized for being brusque with colleagues, Congress, even correspondents from cable-TV networks. But he seems to have mellowed lately, answering my questions in a far more relaxed manner than in times past. If I didn't know better, I'd say he even enjoyed the experience. Not that listening to Summers is always easy: His locutions on the economy can get so thick, they make the cryptic Greenspan sound like Will Rogers. Speaking of Greenspan, the Federal Reserve chairman and the Treasury chief seem to differ over how much more economic growth America can handle. Read on.

Insana: How does the economy look to you right now?

Summers: We feel very good about the American economy because of budget surpluses and because information technology--a key input to the New Economy--is coming way down in price. The result is lower inflation and unemployment and higher productivity.

Insana: Will this info-tech "disinflation" be helping the economy for a long time to come?

Summers: Someone has called it a river, not a wave. I don't know, but all of the evidence suggests we're only a small part of the way through the benefits. We're fortunate in enjoying an expansion that has been investment-led, capacity-creating and driven by productivity growth. So the fundamentals of our economy are strong.

Insana: What, no weaknesses?

Summers: At moments like this, it's important to avoid complacency. If excessive confidence causes consumers and investors to lose sight of the risks inherent in economic life, to borrow or lend imprudently, to engage in unrealistic spending, to create capacity excessively, then complacency could become a self-destroying prophecy. Certainly we in government, as we make our budgets, have to be mindful that if economic history teaches us anything, it's that not all surprises are positive.

Insana: Greenspan and most Fed officials describe inflation as the principal risk at the moment. Do you agree?

Summers: A crucial priority is to avoid the kinds of supply-demand bottlenecks that create inflation. We have an economy where jobs are looking for people as much as people are looking for jobs. That points to the importance of a whole set of what we used to think of as social policies that are now macroeconomic issues--policies that encourage people to move from welfare to work, that help moms work and still take care of their kids, that help those with disabilities work.

Insana: The Fed seems to think the economy can grow 3.5% to 4% a year, max, without generating worrisome inflation. Is that the best speed limit?

Summers: I don't believe in setting speed limits for our economy, and certainly the past few years suggest there's been some real pickup in the economy's growth potential. What we have to do is promote as much growth and supply as we possibly can.

Insana: Greenspan has suggested that surging productivity rates are hypnotizing investors into bidding up the stock market, fueling the so-called wealth effect and making the economy heat up faster than it should. Is surging productivity now our enemy rather than our friend?

Summers: It's very important to be absolutely clear on this point: Productivity growth is a good thing. It means higher standards of living. It means more job creation. It means more international competitiveness. It makes us stronger as a nation, and it makes people better off. There will on occasion be appropriate adjustments, and they will take place as productivity growth changes, but more productivity is always a good thing for our economy.

Insana: Is the stock market accurately reflecting that these days? Or is the market too excited about the intense economic action we've seen lately?

Summers: I would not attempt to make judgments about the level of markets. That's for each investor to do. Our approach is to focus on the economy's fundamentals, and if we get the fundamentals right, the rest will follow.

Insana: We're coming up on what could be the summer of America's discontent, with oil and gasoline prices possibly going still higher. Is the run-up in oil and gas a threat to growth?

Summers: It's a very different economy than it was in the 1970s. Oil is only half as important an economic factor as it was 30 years ago--the price of oil in today's dollars was in the $80 range in 1980--and we're fortunate to have a major offsetting factor: The price of information technology is coming down rapidly, and that's an even more important input into the economy. We'll certainly be watching and doing what we can with oil prices. And I'd say that in diplomacy negotiations of this kind, effectiveness is easier if one is not seen to be effective. Not everything that we're doing are we talking about.

Insana: I gathered that. But you just said it's not the government's role to manage markets, and yet I've never seen Energy Secretary Bill Richardson scurry so much as he has recently, running from OPEC country to OPEC country, trying to talk everybody into raising production to push down prices.

Summers: Well, my comment about managing markets was with respect to the stock market. Clearly, the global oil market is not a free market; members of the OPEC cartel play an important role in it, and there's obviously an important political dimension that makes political dialogue an appropriate tool of policy. I think it's a tool that's best used with discretion, which is why I'm not going to discuss this any further.

Insana: Then let's discuss the upcoming presidential race. Can you articulate what the economic themes in this election will likely be?

Summers: I'm not a political spokesman, so let me just say I don't want to make a political comment. But I think that among the crucial issues in terms of the country's economic direction going forward are the questions of whether we're going to preserve the federal budget surplus and pay down debt or whether we're going to use up the surplus. What kind of approach are we going to take to strengthen and fortify Medicare and assure that it has the resources it needs and provides the kind of modern benefits package that it would if it were adopted today? Will our economic strategy emphasize inclusion and give everybody a chance--or will it focus on supporting those at the top and allow the benefits to follow from that?

Insana: Is that a shot at George W. Bush's tax-cut plan?

Summers: I'll leave it exactly as I said.

Insana: There's no role for tax cuts?

Summers: The right priority is to start with the tax cut that's best: paying down the debt, taking the burden of future principal-and-interest payments off of American citizens and taking pressure off interest rates. Each one-point reduction in interest rates reduces U.S. mortgage costs by $250 billion. Targeted tax cuts can help middle-class families meet crucial issues, whether it's saving for a college education, buying a new home, preparing for retirement or taking care of an aging relative. But we think that massive unpaid-for tax cuts could put the expansion at risk by putting upward pressure on interest rates, undermining the fiscal discipline that's brought us to this point and making it more difficult to address the crucial issues of strengthening Social Security and modernizing Medicare.

Insana: Let's look at the overseas side of your agenda for the next six months. First, China. You want Congress to approve China's entry into the World Trade Organization and to permanently upgrade China's U.S. trade status. Why is that?

Summers: China faces very large economic challenges--in managing its financial system, in managing its large state enterprises, in creating an economic environment based on the rule of law that can attract investment. We've got a great stake in China's meeting those challenges successfully, which is why it's terribly, terribly important that Congress pass the WTO treaty this year. It's not about them, it's about us. It's about whether we will get the benefits of the deal we negotiated or whether only Europe and Japan will get the benefits. It's about whether those in China who believe in markets and the Internet are strengthened or weakened. The best thing we can do to support constructive change on the continent in China and in Asia is to pass legislation [that would grant China permanent most-favored-nation status].

Insana: Japan appears to be back in recession. I understand this has long been an area of frustration for you and your predecessor. What should Japan be doing that it's not now doing?

Summers: It's very important that they avoid what I've called the complacency of diminished expectations, being willing to settle for 1% or 2% growth. It's really very important that Japan move ahead, in particular with structural reforms to allow market forces to operate, to create incentives for job creation.

Insana: Another hot spot is Russia. Two years ago we cared intently about its economic troubles--the debt default and currency devaluation there sparked a huge crisis here and around the globe. Yet few people are talking about Russia in any meaningful way these days. Is Russia off the radar?

Summers: We pay close attention to a phrase some people use: "Weimar Russia." It points to the enormous stake we have in Russia's economic evolution. At the same time, we have to recognize that Russia and Russians will shape Russia's future, that we can't want prosperity and stability in any country more than the people who live there. But I expect we will be engaged with Russia on a range of economic issues, including economic reform, issues relating to debt, following its elections.

Insana: Final question. If you were to reflect on your time so far as Treasury Secretary and had to wish for a legacy, what would it be?

Summers: That this was a period when the U.S. did everything it could to strengthen not just the other industrial countries but the global economy as a whole. We've seen some new opportunities brought to some of the poorest countries in the world, and my hope is we'll continue to see a resurgence of American internationalism.

Ron Insana is co-anchor of CNBC's Business Center and author of the forthcoming book The Message of the Markets (HarperBusiness).