Federal Budget Deficit Worries Greenspan

[PfcHammer]

http://news.yahoo.com/news?tmpl=story&u=/ap/20040506/ap_on_bi_ge/greenspan_1

Federal Budget Deficit Worries Greenspan

14 minutes ago Add Business - AP to My Yahoo!

By MARTIN CRUTSINGER, AP Economics Writer

WASHINGTON - America's soaring federal budget deficits represent a major obstacle to the country's long-term economic stability, Federal Reserve (news - web sites) Chairman Alan Greenspan (news - web sites) warned on Thursday.

Greenspan told a banking conference that the federal budget deficit was a bigger worry to him than America's soaring trade deficit or the high level of household debt because those two problems can be corrected by market forces.

"Our fiscal prospects are, in my judgment, a significant obstacle to long-term stability because the budget deficit is not readily subject to correction by market forces that stabilize other imbalances," he said in remarks to a banking conference.

Greenspan noted that the federal deficit, estimated to climb above $500 billion this year, will amount to 4.25 percent of the total economy after being in surplus just a few years ago.

<snip>

[displacedtexan]

1. Translation: Pay no attention to 13 interest rate cuts since Jan. 2001!

Pay no attention to tax cuts for the wealthy!

Pay no attention to what I said previously about the deficit not being a bad thing.

Pay no attention to my advice to home owners, which encouraged them to drop fixed rates and go for variable rates... just as interest rates started creeping upward last month.

[skooooo]

2. fat cat capitalists...

..getting ready to bail on Bush big time!

[salin]

3. Then why did he keep supporting Bush's tax cuts?

And not speak up when bush plays the current game of:

a) We will cut our deficits in half in the next five years (which, btw, will still be at pre-bush record highs, if you add the costs of Iraq - which they keep excluding from the budget)

This is only true if the tax cuts are phased OUT, as is the current law.

and

b) Congress MUST make the tax cuts permanent

Which will make the HUGE deficits permanent, making claim a) false.

Bush continues this rhetoric, and Greenspan stays quiet. Furthermore Greenspan was supportive of Bush's deficit swelling tax cuts. He has become a big part of the deficit problem, by giving legitimacy to the policies that have created and maintained these deficits and the staggering rate of amassing cummulative debt.

[papau]

7. Greenspan wants end to "nanny" state - No welfare, Soc Sec, Medicare, educ

monies being spent by Federal Gov - but the gov would still collect payroll tax since that is just a better designed income tax that avoids hitting the rich,

Classwarfare is usually won by the rich - they can buy the media whores to convince us it is unamerican to complain,

[salin]

8. Which is why his decrying the massive deficits is such a JOKE.

[Go Eagles]

9. In addition

Greenspan kept raising interest rates in 1999/2000 at the approach of an election on inaccurate claims that the economy needed to be cooled down because it was too strong. He has really shown his true partisan colors.

[nodictators]

14. Greenspan's rate increases cost Gore several million votes

Remember, former Fed Chairman Paul Volcker raised interest rates before the 1980 election. Volcker, a hardcore Repub who was appointed by Carter, sent Carter into the 1980 election with an 11% prime rate. Small business owners, who often paid prime + 3%, were dying. Of course, for that and other reasons, Carter lost.

Greenspan exposed himself when he sharply reversed course a few weeks after Bush's appointment to the WH and began the series of rate decreases. Naturally, the Heil Bush "news" media never took notice of Greenspan's politically-motivated, roller-coaster managment of interest rates.

[mbperrin]

4. Hell-o-o-o!

My mom and dad knew that you couldn't keep going into debt deeper and deeper every single year forever! They were 8th grade dropouts! Welcome to the real world, Mr. G-man!

[DBoon]

6. But your Dad and Mom

couldn't force the rest of the world to accept their worthless bank notes as actual currency, nor could they invade foreign countries to steal what they could no longer afford.

[DBoon]

5. Now remind me again who was president

"just a few years ago" when the budget was in balance?

[bif]

10. Yet he approved the huge tax cuts!

What an asshole. Anyone could see this coming.

[jeanmarc]

11. Deficits don't matter, Alan

Dick Cheney told me this, and we know how reliable that old dick is.

[gratuitous]

12. But he's not so worried as to recommend taxing the overrich

It's those goddam disabled people on SSI and their $478 a month that's bankrupting the system! Right GE? I mean, NBC. Right Westinghouse? I mean, CBS. Right Disney? I mean, ABC.

[DFWJock]

13. Hasnt he heard

That deficits dont matter....

As President Cheney said: "Ronald Reagan proved that."

[mumon]

15. I guess this story goes in the

"No shit, Sherlock!" folder.

[section321]

16. Greenspan, the master bubble blower....

He enabled this deficit by signing on to Bush's first tax cut in 2001. And now he's worried because he's caused a whole new problem trying to fix the last problem (the dot com bubble).

I'm really starting to wonder about Greenspan.