On Apr 28, 12:30 pm, heav <p....DeleteThis@inyopro.com> wrote:
> The bit about Greenspan thinking zero Federal Debt would be bad was
> from a very short snippet of a Larry King interview I happened to hit
> upon when channel surfing when Greenspan was out selling his recently
> published book.
OK, on Larry King's show, Alan Greenspan makes a comment that zero
federal debt would be bad, and that get turned into this:
"The bankers whose friends and associates profit from lending the
U.S.
government the money when the budget runs a deficit were panicked
(Alan Greenspan has written about this) that the Clinton era tax and
spending levels, if continued, would result in ZERO debt, something
Greenspan saw as potentially disastrous. Yeah - disastrous for all
his buddies who make enormous profits loaning our government the same
money they should be paying in taxes. "
Let's see what an independent source like the BBC says about where
Greenspan stood on reducing the federal debt:
http://news.bbc.co.uk/1/hi/business/the_economy/411973.stm
"But in a change of tack last month, the Clinton administration
indicated that it was also prepared to consider using some of the
surplus to reduce the overall government debt.
Such a course of action has long been advocated by Alan Greenspan, the
influential chairman of the US central bank, the Federal Reserve.
He argues that reducing government debt should take priority over tax
cuts, as the move will free funds for private investment and lower
government spending."
That summary is consistent with everything I've heard Greenspan say in
testimony to Congress, speeches and interviews.
In other words, you've again taken something you don't understand at
all, and with jaundiced views, turned it into something it isn't.
Greenspan is right that zero federal debt would be a bad thing for a
number of reasons. The main one being that the FED buys and sells
govt securities in the open market to affect interest rates. If they
want to lower rates and stimulate the economy, they buy govt
securities. Without those to buy, they would have to find some other
financial vehicle, which opens up all kinds of protential problems.
If at least part of that debt is used to finance long term capital
items, like bridges, roads, or an aircraft carrier, it's no different
than a homeowner buying a house with a mortgage. The key here is the
relation of the total debt to the size of the US economy. It's still
not anywhere near historic levels when compared to the economy, but I
agree it would be good for it to be lowered. And Geenspan was always
in favor of reducing the present level of Federal debt and less govt
spending.
>
> I have no intention of buying Greenspan's book. Perhaps those
> mindless automatons who still worship at the Project for a New
> American Century/American Enterprise Institute altar have already
> purchased the book by Reagan's Great Rudderman who never took his hand
> off Reagan's tiller and they should read it for themselves.
If you bought the book, you might learn something. As for
Greenspan's stewardship at the FED, only a tiny minority would bitch
about that. At the beginning of his chairmanship, the economy was in
a disaster, unemployment was 9%, inflation 7%, and govt bonds were
yeilding 18%. He was there with Reagan when all that was reversed
through tax cuts and sound monetary policy, resulting in the longest
expansion in peace time history.
>> Stay informed about: Yikes! Diesel $4.50/gallon 
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