Republicans seek economic wisdom from Greenspan

July 14, 2009

Alan Greenspan may have retired as chairman of the Federal Reserve, but his insight is still in hot demand, so much so that Senate Republicans invited him to be their guest speaker at their weekly policy lunch.

FINANCIAL/Per his normal practice, Greenspan declined to tell reporters what he told the lawmakers behind closed doors, but that did not stop a few senators from spilling the beans.

New Hampshire Republican Senator Judd Gregg said the former Fed chief talked mostly about the need to address the long-term budget deficit, specifically the Medicare healthcare program for the elderly and those with disabilities. The U.S. deficit is expected to crest at more than $1.8 trillion in fiscal 2009 which ends Sept. 30.

On the economy, which has been in a recession since December 2007, Greenspan apparently offered a slightly brighter picture. That would match  what more and more economists are saying — that the recession is in the process of bottoming out and look for a recovery to take root in the current quarter.

“I think he thinks things are improving,” Gregg told reporters.

Greenspan offered some “encouraging thoughts, banks are better off than they were six months ago,” said Nebraska Republican Mike Johanns. “On housing, if I remember correctly, (Greenspan offered) some indication that things were bottoming out, but again I think that’s reflective of what others are saying.”

One senator who has been pressing to boost transparency at the Fed, South Carolina’s Jim DeMint, said he was unable to corner Greenspan and ask him about efforts to give authority to the Government Accountability Office to audit the central bank’s operations.

DeMint’s effort earlier this month to attach a provision that would give the GAO such oversight was blocked in the Senate.

“We ran out of time, and there were or six or eight guys who jumped in front of me asking questions” of Greenspan, DeMint said. He said Greenspan’s presentation focused on the unsustainable debt level and if that was not dealt with, “we are on a collision course with disaster.”

For more Reuters political news, click here.

- Photo credit: Reuters/Kevin Lamarque (Greenspan testifying to Congress in 2008)

6 comments

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but people only hear what they want to hear.in CA you have a situation were police are going to be laid off work because there is no funds,and yet you have social security being paid to illegals.you have threats of criminals being set free and prison officers numbers being reduced because of cost reduction and yet you have hundreds of murders on death row who will probably die of old age.you can only tax the rich till they don,t exist then what is the plan?

Posted by brian lee | Report as abusive

Sweet. The man who brought us 1% rates and binge capitalism is here to save us from the madness. Phew.

Brian Lee, I’m not sure you wrote one true thing. Well, except for your first sentence. And the part about service cuts. So you hate taxes, but you also hate the fact that cops are being laid off because of lack of funding?

Posted by jvill | Report as abusive

It seems Al is still hocking his book. He devoted a whole chapter to the impact of medicare on the deficit. We would have faired better if Mr. Greenspan was not so full of himself that he fell asleep at the switch. I think it went to his head when he was hailed a the Maestro when the eoconomy was falsely doing well. It would be foolish and just downright stupid for Republicans to start quoting the Maestro. They more than likely are going to use him to attack medicare and develop a scare tactic to oppose Health Reform.They have to be desperate.

Posted by Robert | Report as abusive

In fact I saw the Liquidity Trap coming in 1994 and Alan Greenspan saw it coming in 1996 as I show in my Tract: Plea for a New World Economic Order.

Chapter III: Greenspan Conundrum and Bernanke Global Saving Glut.

Chapter III, Paragraph 1:
Greenspan Conundrum and Income/Wealth Disparities.

The White Proposition is simply unsound even from a theoretical point of view:

Chapter III.
Greenspan Conundrum and Bernanke Global Saving Glut. Paragraph 3: Bubbles & Bursts.

jvill,are you saying that you don,t believe that illegals are getting SS and there are not hundreds on death row?or are you saying you not prepared to believe that?like i said i live in CA and here any thing goes.i worked for a company and one of it,s male employees had a fictitious social security number,apparently it had belonged to a women who had been dead for years.unfortunately when she died she owed 5000 in back taxes,and they came after him for the back taxes.when he explained it was not really her they apologized and gave him a different social security number.probably something else you are not prepared to believe?

Posted by brian lee | Report as abusive

With the previously unthinkable nationalization of corporate American icons now a reality, the role and relationship of our government and the Fed must be examined and redefined if this Republic we have taken for granted is to persevere.

To Quote Edmund Burke:

“It is to the property of the citizen, not to the demand of the creditor of the State, that the original faith of society is pledged. The claim of the citizen is prior in time, paramount in title, and superior in equality”
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Greenspit on Fed Autonomy: http://www.youtube.com/watch?v=ol3mEe8TH 7w

The Coming Battle 1899: http://www.inlibertyandfreedom.com/PDF/B ankingSystem.pdf