Where was this Alan Greenspan when he was helming the Federal Reserve?
In recent years, Greenspan has had his come-to-Jesus moment, complaining about every aspect of the state. It has been refreshing, but also head-scratching because pretty much endorsed all functions of government and their actions for 20 years at the central bank.
Recently, speaking in an interview with CNBC, Greenspan warned that entitlements will weaken economic growth in future. The former Fed Chair continue to warn about the pending insolvency of Social Security, Medicare, and other entitlement benefits that are bankrupting the federal government.
“I think the real problem is over the long run we’ve got this significant continued drain coming from entitlements, which are basically draining capital investment dollar for dollar,” the former Ayn Rand disciple said. “Without any major change in entitlements, entitlements are going to rise. Why? Because the population is aging. There’s no way to reverse that, and the politics of it are awful, as you well know.”
He noted that the economy looks “reasonably good” right now, but he thinks long-term growth will “fade very dramatically.” In addition to the fiscal issues relating to entitlement, Greenspan believes that the crisis in Europe will further contribute to America’s economic decline.
It is forecast that Social Security will go bust within the next decade, though the fund will soon tap into its reserves (SEE: Social Security faces $11.4 trillion shortfall, will tap reserves in 2019). Medicare is also expected to be in the red in the next several years.
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