Greenspan Says U.S. Deficit Is 'Scary'

Alan GreenspanThe U.S. fiscal deficit is "scary" and the government should slash entitlement spending, former Federal Reserve Chairman Alan Greenspan said.

"We're involved in a dangerous game," Greenspan said, according to Bloomberg News.

The deficit may be a factor in low investment by U.S. companies, as it creates uncertainty about tax policies, Greenspan said in an opinion article for the Financial Times this week.

The U.S. needs an austerity program, Greenspan said. The former Fed chairman said that cutting budgets is a better way of reducing the deficit than raising taxes.

Still, Greenspan reiterated his support for letting the Bush tax cuts lapse. During the Bush administration, he was a key proponent of enacting the cuts.

Greenspan, 84, served as chairman of the Fed from 1987 until 2006.

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homegb

I's just like to know, with so many unemployed, and so many bail-outs for car companies, big banks and stock traders, why does the u.S government have to make such a massive greedy profit on federal student loans? They charge people interest on interest, then capitalize that interest to call it "principal" and add more interest on interest...and then they wonder why so many people are defaulting on their student loans?! That's easy! Because Uncle Sam is suddenly in the loan sharking business and we're the ones left hoolding the bag. Funny, we're also the very same people who paid for those bail-outs!! You'd think, with all the big players getting bail-outs and amnesties, the government would back off the little guys like us. Guess fairness and decency has gone out of style these days?

October 09 2010 at 9:07 PM Report abuse rate up rate down Reply
georgii1

During the Bush administration Greenspan was key proponent of many of the proposals that got us in this mess. I still can't believe that great slip of his during the bank hearings: he didn't think they'd go so far as to destroy themselves (the banks). Let them do anything they want, it won't hurt that much. Well, it destroyed retirements and cost a lot of folks credit and loan problems all over the country and now he says cut. And, for all those now hanging on till SS, don't forget that's an entitlement in his book. He's talking austerity program and that is what is pulling the people out in the street in Greece and other parts of Europe.

October 08 2010 at 1:34 PM Report abuse +2 rate up rate down Reply
jtmader

The idiot advocates higher taxes. Raising taxes may produce more tax revenue. Cutting taxes actually produces more tax revenue. It makes no difference. The Bush tax cuts produced a 42% revenue increase. Every increase regardless of how it is achieved is spent. It never pays down the debt. The Bush tax cuts produced a 42% increase in Federal revenue. A reasonable person would think that it would be more than enough to pay down the debt. Congress, instead, spent it and then some to produce $200-billion deficits every year. That not being enough, Obama has produced $1.3-trillion deficits. The Regasn tax cuts produced a revenue windfall and the Democrat Congress declared his bslanced budgets "Dead on Arrival" and spent us into more deficits. Go back and read the bloody newspapers. The only way to control the Federal debt may be a national catastrophe when the politicians who put us in this mess and the government employees who feed at the trough and don't do their jobs are arrested, tried and executed by people's court. It has been done before. Either the government gets ahold of itself or the people will terminate them with prejudice.

October 08 2010 at 10:27 AM Report abuse +1 rate up rate down Reply
jkennedy806

1987 to 2006 Isn't this the period of time when the housing bubble started to build right after the last S&L too big to fail econoic crisis. Whose is this old fart kidding??? Someone in Washington has to step up to the plate and start doing investigation of banksters, lobbyists, federal agencies, and our house and senate members. AUDIT the fed. We all know there is something terribly wrong in Washington. Now it's time to let them know, their time is up

October 08 2010 at 9:15 AM Report abuse +4 rate up rate down Reply
GEORGE

GREENSPAN MUST BE A REPUBLICAN. WHAT OR WHO ELSE COULD DAMAGE OUR ECONOMY AS MUCH. NOW ITS TIME FOR THEM TO PAY. I LIKE THE WAY POLITICANS DRAG FINANCIAL BUSINESS AND WALL STREET TO HEARINGS. LETS HAVE HEARINGS FOR POLITICIANS LETS BRING THE FACTS OUT ABOUT WHO PLAYS AGAINST US TAXPAYERS.

October 08 2010 at 9:04 AM Report abuse +2 rate up rate down Reply
phillyboy

Greespan is just trying to GO DOWN IN HISTORY on a good note like RUDOLPH THE RED NOSED RAINDEER. It's not gonna work. The WORLD KNOWS about your DESTRUCTIVE INTEREST RATE POLICY.

October 08 2010 at 8:54 AM Report abuse +5 rate up rate down Reply
1 reply to phillyboy's comment
bbpincorp

when I was 5 my dad would come home from deer hunting and say he killed Rudolph....I cried

October 08 2010 at 1:49 PM Report abuse -1 rate up rate down Reply
phillyboy

If it is soo SCARY then why did you help cause it with your FAILED POLICY fool?

October 08 2010 at 8:49 AM Report abuse +4 rate up rate down Reply