Greenspan says US deficit cannot grow forever

[Judi Lynn]

Greenspan says US deficit cannot grow forever
November 15, 2005

Washington - Federal Reserve chief Alan Greenspan said on Monday the huge US current account deficit cannot expand forever as foreigners will one day tire of financing it.

But in a speech to the Bank of Mexico, he said the US economy should be able to weather the adjustment provided it stays flexible.

Greenspan noted that thus far, the United States has experienced little difficulty in obtaining the foreign investment needed to finance a deficit running at more than six percent of gross domestic product.

But the deficit "cannot persist indefinitely", he said, as investors are likely to grow alarmed about the country's ability to pay its external debts as the trade and capital account shortfall expands further.
(snip/...)

http://www.busrep.co.za/index.php?fArticleId=2995273&fSectionId=613&fSetId=662

[Spinzonner]

1. Brilliant, insightful statements like that

are why he's the Fed Chief and we're only lowly, insignificant citizens

[truthisfreedom]

2. a little help, Alan? suggestions, please?

a little less over-simplified accounting-speak and a little more "how do we get the hell out of this situation?" like "create 10 more microsofts?"

[xchrom]

3. gasp! noooo!

ok -- thanks for that nuanced observation.

[Democat]

4. Greenspan only wants it to keep growing while a Republican is president!

As soon as a Democrat gets elected president, Greenspan will be the first to demand a balanced budget.

[BlueManDude]

7. Right on. A sudden the need for "fiscal responsibility" .

[no_hypocrisy]

5. I've already heard freepers talk about "Screw'em! We just won't pay

them (foreign investors) back!"

That kind of attitude in enough numbers might give investors reason to put their money somewhere else, let alone the obvious reasons.

[donco6]

6. How hypocritical can you GET?

They were the ones screaming about 3rd-worlders being forgiven their debts to the US.

[no_hypocrisy]

8. Exactamundo. They think it's like stiffing the credit card companies.

Well, stiffing the credit card companies BEFORE the bankruptcy bill was enacted . . .

[anotherdrew]

22. that should end the investment right now

the foreign investors are just selling us the rope to hang ourselves with. 6% of GDP per year now.... now that money goes to fund our imports, so when the investor wants their money, plus interest, back... that comes from where?

[FVZA_Colonel]

33. They've actually said that?

Ahh well, if that happens, at least when the United States is as dirt poor as possible due to international isolation, we'll know who to blaim.

[niceypoo]

9. you mean when the interest payments surpass the tax reciepts

our credit will be bad? WOW! Brilliant, BRILLIANT!!

[GHOSTDANCER]

24. Ya he's a real genius ain't he?

Sure has a lot to say while he jumps from the ship, the ship he's been steering don't he?

[Jim__]

10. WOW! No wonder this guy is Fed chairman.

Maybe bush can recommend him for the Medal of Freedom.

[indepat]

11. Greenspan, you blankety-blank, you green-lighted W's tax cuts. Alan

Abelson skewers Greenspan in the November 14, 2005 edition of BARRON'S saying, in part, "Nor should we slight his essential participation in the magical transformation of lush budget surpluses into historic budget deficits." I again proffer the Greenspan name will live in infamy for seemingly putting the implementation of extreme partisan agenda before country.

[Media_Lies_Daily]

15. He's guilty of far more than that...check out his rate-change decisions...

...to raise rates prior to the 2000 Election to slow/destabilize the roaring Clinton economy.

Refer also to the decisions made by Big Oil to raise gasoline prices prior to the 2000 Election. That drove another stake in the Clinton economy.

Both organizations are political allies of the Busch Crime Family.

Coincidence? I don't think so.

[indepat]

16. Alan Abelson says Greenspan created two of the greatest speculative

bubbles in history, one in stocks and one in housing. (BARRON'S November 14, 2005 edition, page 6.) For these and other messups, Alan says W awarded him the medal of freedom.

[Media_Lies_Daily]

12. Greenspan = deficit enabler.

[RUMMYisFROSTED]

13. In other news, Greenspan changes his name to Sherlock.

[Vickers]

14. Wow, thanks for the explanation, Alan!

:sarcasm:

[rocktivity]

17. Candidate for this month's "You Call This NEWS?" award

A reasonably well-adjusted twelve-year old would tell you that a deficit can't grow forever.

:headbang:
rockantion

[midnight armadillo]

18. Translation of technical talk

But in a speech to the Bank of Mexico, he said the US economy should be
able to weather the adjustment provided it stays flexible.


Translation of the term 'flexible': So long as we freely lay off workers and eliminate benefits and cut salaries, while exporting our remaining manufacturing base, we'll do great!!!

[Sagan]

19. No no no.. you got it wrong..

It's:

"So long as the GOP is in power, we can continue to run up deficits. The minute the Democrats take power, it's their problem to fix."

Greenspan is an over-rated partisan hack. No more, no less.

[Javaman]

20. This is the line that gets me...

"foreigners will one day tire of financing it". And they will.

Well no shit jackass. This is the classic example of the friend that mooches money from you, at some point, you say, no more. moron* and his cronies are nothing but global mooches to finance their fucked up policies and wars. They aren't shooting us in the foot, they are cutting off both our legs. At least with a foot wound you can limp.

We are so fucked.

[lebkuchen]

21. Bush treats it like the expanding universe.

You mean, eventually it will simply lose energy and burn itself out?

[triguy46]

23. after being co-opted by * for the past 4 years...

He's danced the dance, now he'll tell the truth. What a dork.

[ramapo]

25. He really is a genius!

I am in awe of his insightful remarks....

[wordpix]

26. no problem, Greenspan, BushCo plans to sell off all public lands and

natural resources. National wildlife refuges, parks, forests and monuments, here comes BushCo to give up the national collateral.

I am not kidding. I believe this is the BushCo grand plan besides "Iraqi oil will pay for the war."

Yeah, right.

[The_Casual_Observer]

27. "cannot persist indefinitely"

That's why he is such a god! I would have said "It can't last forever"
It's all how you turn a phrase I guess.

[TexasLawyer]

35. What do you get when you cross the Federal Reserve Chairman

with The Godfather?

A. An offer you can't understand.

Sorry-- that's my only Federal Reserve joke.

[AirAmFan]

28. Did AG mention his own role in CREATING structural deficits 24 yrs ago?

Greenspan's "Social Security Commission" under Reagan paved the way for a more than 25 percent hike in FICA payroll taxes on the poor and middle class for more than two decades. Ostensibly, this tax surcharge on workers would "pre-fund" Baby Boomers' retirements. But, as a far-right Ayn-Rander, Greenspan saw to it that there was no mechanism for ensuring that the extra TRILLIONS in FICA revenues would be used for their intended purpose. In his mind, that would have been "socialism"!

Compare the way Social Security manages payroll revenues to the way state employees' retirement systems operate. There are state boards that invest state workers' payroll tax money conservatively in PUBLICLY TRADEABLE bonds and stocks, making the principal, dividends, and interest available to fund only retirement benefits. Social Security instead "invests" FICA revenues in NON-PUBLIC bonds that can only be bought back by the US Treasury. Treasury then spends those FICA funds on whatever Congress at the time prioritizes: tax cuts for the richest 2 percent, corporate welfare, overseas aggression, militarization of internal US security, etc.

Add 62 years to 1946 and you see trillions in Boomer Social Security retirement liabilities starting to come due in 2008. But, thanks to Alan Greenspan, the "pre-funding" for those bills is long gone.

[Megahurtz]

29. Fear tactics maybe?

You're the one in charge, Bucko. You do something about it!

:sarcasm:

[XemaSab]

30. Question: Which of the following doesn't belong?

a. a hammer
b. a drill
c. Alan Greenspan
d. a sandwich
e. a screwdriver

Answer: A sandwich is not a tool.

(with props to Get Your War On)

[daleo]

31. But...Reagan is a god who went to heaven

Surely he proved deficits are for mere mortals.

[barb162]

32. He should have been put out to pasture a few years back

He has gone along with just about everything shrub wants, to the detriment of the American economy, the American worker, etc. Now he's backpedalling on what he was fostering the last few years. Uncle Al, get ouddahere NOW!

[TexasLawyer]

34. China has its hand

on the switch to the electric chair that America is strapped into.

Is this nation stronger because of its HUGE expenditures on the "war on terror?" I think not.