Greenspan Remarks on Tax Cuts, Medical Costs Depressing the Economy

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I am struck by Alan Greenspan's remarks in today's NY Times. I am not
a disciple of his. Yet I would not have predicted him to be so
outspoken on the role health care spending, for one, is taking in this
Depression. His mention of how we do not have a WWII to bail us out
here is also noteworthy to me.
While Mr. Greenspan?s reputation has been tarnished ? given the Fed?s
failures to pop the real estate bubble and to rein in subprime
mortgage lending ? his perspective, born of decades of data-crunching,
has made him a figure revered by many in the markets. His opinion
still carries considerable weight and his views on the tax cuts will
reverberate in the debate next month in Congress.
?Unlike in World War II, when we knew that military spending and
deficits would fall sharply, our current understanding of the future
is extremely limited,? Mr. Greenspan said. ?There?s an especially high
level of uncertainty in forecasting Medicare.?
He said the country?s fiscal problems could not be solved by higher
taxes alone. ?We are going to have to confront a major surge in
medical entitlement spending. Irrespective of what you say should be
done on the tax side, you still have to cut some benefits on the
expenditure side.?
Mr. Greenspan, who is known for his political skills and his
connections in both parties, bemoaned the political gridlock in the
?We have known that the tax cuts were going to expire at the end of
2010 for nearly a decade but nobody did anything to address the
issue,? he said.
Asked whether higher taxes in 2011 could choke off the nascent
recovery, Mr. Greenspan replied: ?It is risky, but the choice of not
doing it is far riskier. It is the difference between bad and worse,
but in neither case do I think the evidence suggests that it would be
the tipping point for the economy.?
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on 8/7/10 10:37 AM Elle said the following:
Why would anyone listen to this fool who set the stage for taking down the global economy?
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601087&sid=a_ZFq4y9oJiY&pos=3 The Bloomberg article has some data I haven't seen summarized before, and it casts some perspective over what some are referring to as a possible 'double dip' recession.
What I find most difficult about 'peering into the future' is sorting out confusing (or confused) talk. To me it seems we may be ending a period of excesses and (to be charitable) "carelessness." American values as embodied in the Constitution are not just an American concoction. Those values are based on many truths from Ancient Greece, forwards. A return to these values, at the expense of false values of greed and "expedient cheating," is good.
If we lived in a period of great prosperity and technological advance, we projected too much, too far, too confidently - we predicted icing on the cake as a given. With reference to medicare and also State and Federal pensions, some false promises are going to be taken back. Maybe we are moving into a new age in which reasonable expectations and adequate provision for the future will prevail in the pysche. We cannot burden today's 20 year-olds with our unrealistic wants. I don't think "debt" is the problem (it's the symptom). It's expecting w-a-y too much that is the problem. And all economic classes are guilty of it, from those who want "free" services to those who want hundreds of millions of dollars in their checking (AND eighty-five thousand dollar waste-baskets). In all areas, there has to be some rebalancing, but it won't come from political action alone - it will require individual responsibility.
That's just my opinion, for what it's worth, but I really hope it is just a somewhat naive statement in retrospect, of precisely what a great many people have been doing for the past three or four years. America is a great nation, and you as a citizen, are indeed right and rational and sane and good.
I've got my unexpected AC / insulation problems to solve, and my garden to fix up (a lot of sweat pours out her in sunny Florida). I'm going to get it done, and I'll get it done right. I have to forego some of the things I "wanted" for a while. A wiser man wouldn't have paid what I paid for this house, but I'm the one "who done it," and I'm the one who has to live with it now. It's all too simple to generalize that all over the country. I think that's a reflection of American values, and I think we will make it through this period of confusion, and win for the better. I don't think it will be socialism, or runaway collusions and greed, just a more realistic and responsible society all around.
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