I added the only comment, because the person jives with the deficit commission and has ideas for competing forms of currency in the US to give our paper dollar some competition. mmmmmm.............
- 11/14/10 05:23 PM ET
Delaying on measures to tackle the deficit could thrust the country into a bond market crisis that would spur a double-dip recession, former Federal Reserve Chairman Alan Greenspan said on "Meet the Press" on Sunday.
"Look, I think something equivalent to what Erskine Bowles and Alan Simpson put out is going to be passed by the Congress," he said. "The only question is, is it before or after a bond market crisis?"
Greenspan said he is "hoping that we have enough sense to realize that we've got to resolve this issue before it gets forced upon us." His fear is that the long-term deficit could "spook" the bond market "to a point where long-term interest and mortgage rates move up very sharply."
"If that happens, that will cause the double dip," he said.
Even though there are some signals the economy is improving, Greenspan said, businesses are failing to make key investments because they are uncertain about the future. He said this is true to an extent that he has never seen before.
"The business sector is concerned is that business is highly uncertain about the future in a way which I've never seen it before and a way in which the data suggests has never, in fact, been so depressed," he said.
Businesses showing an unwillingness to invest in long-term assets, according to Greenspan.
"Unlike previous recoveries when, for example, we would be getting very significant pick ups in building, residential, nonresidential, in a sense, longer-term assets, we're not getting that today," he said. "It's a big hole in the economy."
He pointed out that constructing a building, for instance, is a 20 or 30-year investment. Businesses are unlikely to begin making longer-term investments until some of the question marks disappear, according to Greenspan.
"Unless and until we can begin to lift that pall of uncertainty, it is very difficult to see people reaching out into the longer term," he said.
Still, Greenspan said he doesn't see another crash around the corner, and said a double dip recession in unlikely.
"There's very little evidence of any deterioration that suggests we're about to have a double dip, as they call it. And in fact, if there's any evidence at all, we are actually picking up some," he said.
"We are in a position where we are moving forward largely because the rest of the world is moving forward," he said.
"Look, I think something equivalent to what Erskine Bowles and Alan Simpson put out is going to be passed by the Congress," he said. "The only question is, is it before or after a bond market crisis?"
Greenspan said he is "hoping that we have enough sense to realize that we've got to resolve this issue before it gets forced upon us." His fear is that the long-term deficit could "spook" the bond market "to a point where long-term interest and mortgage rates move up very sharply."
"If that happens, that will cause the double dip," he said.
Even though there are some signals the economy is improving, Greenspan said, businesses are failing to make key investments because they are uncertain about the future. He said this is true to an extent that he has never seen before.
"The business sector is concerned is that business is highly uncertain about the future in a way which I've never seen it before and a way in which the data suggests has never, in fact, been so depressed," he said.
Businesses showing an unwillingness to invest in long-term assets, according to Greenspan.
"Unlike previous recoveries when, for example, we would be getting very significant pick ups in building, residential, nonresidential, in a sense, longer-term assets, we're not getting that today," he said. "It's a big hole in the economy."
He pointed out that constructing a building, for instance, is a 20 or 30-year investment. Businesses are unlikely to begin making longer-term investments until some of the question marks disappear, according to Greenspan.
"Unless and until we can begin to lift that pall of uncertainty, it is very difficult to see people reaching out into the longer term," he said.
Still, Greenspan said he doesn't see another crash around the corner, and said a double dip recession in unlikely.
"There's very little evidence of any deterioration that suggests we're about to have a double dip, as they call it. And in fact, if there's any evidence at all, we are actually picking up some," he said.
"We are in a position where we are moving forward largely because the rest of the world is moving forward," he said.
Federal spending must be reduced. Remove the mandate for government contractors to pay union scale. Reduce government employee's wages to compare with private sector wages and benefits. Allow interest rates to be market controlled so that saving money is again profitable and untaxed. Cut all uneeded government programs, expenses and waste. Prohibit the Federal Reserve from creating money without congressional approval and do a complete audit of the FED. Allow competing forms of currency in the US to give our paper dollar some competition. Gradually phase out SSI and allow tax free contributions of your own choice for retirement investment. Abolish the Department of Education and put all teachers on a performance basis with individual state control. End both of the wars we are in and reduce the executive branch's war powers authority. Get out of the UN. Legalize all drugs, abolish the DEA and seal the borders. Cut all foreign aid except humanitarian aid. Close uneeded foreign military bases. Abolish FEMA, Dept of Homeland Security, Dept of Energy and the Dept of Agriculture. Slash the authority of the FDA. Adopt a balanced budget ammendment. This would be a good start on reducing the deficit.
BY on 11/14/2010 at 21:01
See new plan at http://whitecollargreenspace.blogspot.com/
ReplyDeleteGovernment could save $50 billion per year by having two shifts of white collar employees work each day. Office space costs $50,000/year for each employee yet we only use space 30% of time. We can no longer afford to have banker's hours for all. With over 2 million federal employees this cost-free paradigm change could avoid lay offs/furloughs and reduce pollution.
thank you for the link sounds interesting.....
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