Greenspan Says Painless Solution to U.S. Debt is Fantasy

[Purveyor]

By Joshua Zumbrun & Tom Keene - Dec 6, 2012 9:22 AM ET

Reducing U.S. long-term deficits will inevitably cause economic pain, former Federal Reserve Chairman Alan Greenspan said.

“The presumption that we’re going to have a painless solution to this, I think, is fantasy,” Greenspan said today during a “Bloomberg Surveillance” television interview with Tom Keene and Sara Eisen. “There are a lot of risks out there but the one thing I can be reasonably certain of is we won’t get through this whole issue without some pain.”

The U.S. faces twin fiscal challenges with more than $600 billion of spending cuts and tax increases scheduled to hit at the beginning of next year, threatening to send the economy into an austerity-induced recession, even as rising long-run deficits may prove unsustainable.

Greenspan, 86, who preceded Ben S. Bernanke as chairman of the central bank, blamed U.S. deficits on growth in spending and blamed both political parties, saying “strangely enough, and ironically, the spending surge which is creating the problem here is fundamentally both Republicans and Democrats.”

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http://www.bloomberg.com/news/print/2012-12-06/greenspan-says-painless-solution-to-u-s-debt-is-fantasy.html

[MannyGoldstein]

1. And he's a fucking genius.

Great track record on Greenspan, we should listen carefully to what he says.

Then do the exact opposite.

[closeupready]

3. +1 - he's arguing on behalf of Dimon, et al.

[closeupready]

2. Let's get Karl Rove's opinion, too, while we're at it.

[Nay]

4. You can bet that HE will never feel any pain, nor will his cronies. nt

[dawg]

5. The question is "Who should feel the pain?"

The comfortable? Or those who are already struggling?

(And for the record, I include many of us in the "comfortable" group. It should't be all on the rich. But the poor should bear none.)

[thucythucy]

6. I could be wrong, but didn't Greenspan testify

before Congress at the beginning of the Bush era that the real threat to the American economy was a federal budget surplus, hence the need for the Bush tax cuts.

I wish someone would call him out on that.

[The Magistrate]

8. Yea, Ma'am, He Did: It was the End Of His Credibility

This comment above simply continues his slide into the gutter, since everyone with the brains of a turnip knows it is the decrease in revenue he prescribed, explicitly to prevent paying down the national debt, which is the chief avoidable cause of our present yearly deficits.

[byeya]

16. You remember correctly. Clinton's budget surplus was undesirable - said Greenspan - and the

Bush tax giveaways to the wealthy were just the ticket for prosperity.

Greenspan couldn't see the housing bubble, or didn't want to, and generally embodies Friedmanoid/supply side economic nonsense that has laid this country low.

He should be prosecuted for malfeasence if that's possible. The Henry Kissinger of economic policy.

[unblock]

7. tell us again how damaging it would if the surplus paid off the entire national debt, greenie!

[Barack_America]

9. Then take an aspirin, Alan. And pass them out to your rich friends.

To help ease the pain of their tax increases.

[closeupready]

12. This.

[AnnaLee]

10. Let's see if I can follow the pain.

You have heard of "follow the money" but Greenspan's statements are a welcome change in perspective. I can work the arithmetic better than "follow the money". It has an optimization parameter - "pain". Now let me see, I want to find a debt solution that minimizes the pain.

What about the guy that makes more than he will use in his/her lifetime? Raise his tax? What's the pain? His wealth still grows without bound; it just grows a little slower. He cries on the weekends when he sees an increase of $100M where he expected $120M increase in his net worth. There is certainly a lot more pain in not eating or telling your kid they can't go to college without crushing debt to banks.

Oh, oh, oh, I forgot these are the job creators. Oh, guess what, I did the math. The model says to tax the job creators an extra 5% and use the money to fund start up businesses run by American entrepreneurs; true Americans that is. Close down Wall Street pig sties. They don't employ hardly anyone.

[Frances]

11. Greenspan is living in a fantasy land

He is primarily responsible for the deficit because he testified before Congress that the country could afford tax cuts for the wealthy.

Those tax cuts for the wealthiest 2% not only left the treasury with less money but they also caused the US to lose jobs.

Greenspan does not believe in social security or medicare and that is why he wanted to starve the government.

He is not man enough to take responsibility for his actions.

[librechik]

13. so bend over and take a haircut. Rich like Al won't feel any pain at all.

How dare they throw screaming hysterical fits over what must be about a 4% tax "hike" which isn't even a hike but a return to tolerable rates they enjoyed before the crisis. And never missed a meal.

Fuck these whining babies and roll over the fiscal speed bump.

[99Forever]

14. Would that be the same Greenspan that...

... took 30 years to figure out that greedy capitalists would fuck the rest of us over, given the chance? (Which they have done a thorough job of, btw.)

Yeah, listen to that asshole's plan.

Great idea.

[trumad]

15. The former Ann Rand deciple speaks.

[Ikonoklast]

17. Predictably totally wrong.

Objectivist priest of a failed religion.

[BlueStreak]

18. Can anybody cite a single example where austerity worked?

Ask the Europeans how their austerity is working out.

Ask the Japanese how 22 years of austerity is working for them.

The economy that has been growing the fastest is China, and it is no coincidence that they have made a huge investment in their own infrastructure.

[woo me with science]

19. Reject brazen corporate propaganda.

They feed us helplessness and the belief that our pain is inevitable. We are taught to believe that the world could never be any other way.