The ambient sound you heard this past week was the sonorous voice of Alan Greenspan, who recently retired after 18 ½ years as chairman of the Federal Reserve Board, decider of our nation’s (and much of the world’s) monetary policy.
Greenspan is using his book, “The Age of Turbulence“ (for which he received an $8.5 million advance) and a series of high-profile interviews to try to extricate himself in advance from our nation’s onrushing economic storms, which were put in place by disastrous Republican fiscal policy following Greenspan’s nod or testimonial approval.
He has put Republican teeth on edge by quantifying the cumulative fiscal irresponsibility of Ronald Reagan, George H.W. Bush and George W. Bush. Unlike many others, Greenspan let’s us know the national debt was $700 billion at the beginning of Reagan’s term and $2 trillion when he handed the sinking financial ship over to George H. W. Bush--who had unwisely kow-towed to Republican tax-cutters at the 1988 convention by uttering, “Read my lips; no new taxes,” thus guaranteeing growing deficits.
But it is the reckless deficit spending of the current Bush that leads Greenspan to babble nearly incoherently in an effort to disassociate himself from Bush’s deficit-driving 2001 tax cuts for the rich; and from his utterances in 2006 that the tax cuts be made permanent.
Greenspan now says he feared projected Clinton surpluses would pay off the national debt! And leave government a surplus that would have to be invested in private markets--something, he concludes, we must prevent at all costs
(I agree. Bush’s idea of investing one-quarter of social security taxes in private markets would have made the federal government Wall Street‘s number one player, opening the door for endless political mischief.)
Greenspan also claims he supported Bush’s tax cuts only with a trigger that would repeal the cuts in event of runaway deficits. It was sorta, “I advised against it before I advised for it.” He wisely has not attempted to explain his 2006 election-year endorsement to make the cuts permanent.
The Wall Street Journal gave up some of their op-ed page space usually used for bad-mouthing “government medicine” (like medical care for children, veterans, the elderly and totally and permanently disabled) to let Vice President Dick Cheney spin his objections to “longtime friend” Greenspan‘s obloquy.
Bush deficits, Cheney tells us, are mostly the result of 9/11, like every other disaster he and George have presided over. Besides, Congress failed to act on Social Security reforms (see above), and Medicare and Medicaid reforms, as advised.
Cheney adds, “no other president has spent more time…trying to avert a fiscal disaster everyone knows is coming.”
There you have it, “a fiscal disaster everyone knows is coming,” but for which no one is to blame, not Bush, not Greenspan, not the Republican congresses that Greenspan states gave up principles for political gain, and were left with neither principles or political gain.
The Reagan-Bush-Bush fiscal storm is building to hurricane proportions. The dollar has weakened rapidly.
The euro, once less than a dollar, has exceeded $1.40 (making it likely oil-trading will take place in euros, making it impossible for us to print dollars to obtain oil). The British pound is over $2; the Canadian dollar (universal health insurance and all) is worth more than ours, and oil over $80 a barrel.
The national debt is $9 trillion, $30,000 for every man, woman and child; over $24,000 placed on your children’s and grandchildren’s accounts by RBB. Cheney and Greenspan can write a check for their family’s share of the deficit tomorrow, and never notice it. But can you?
Throw in ordinary American’s low saving rate and consequently low net worth. And that we are buying $900 billion ($3 thousand per person per year, and growing) more from abroad than we are selling abroad.
Yes, I blame Bush for his total fiscal irresponsibility. But perhaps he’s more to be pitied than censored.
Not so, the talented Greenspan, a confessed social climber. He willingly and knowingly served as a shill for George Bush’s fiscal recklessness. In turn, he gained coveted social rank and international notoriety. Only you and I are losers.
Dr. Roy may be reached at email@example.com