Greenspan said on MTP that paying off the national debt was a bad idea

[JCMach1]

HOW CAN WE PUT PEOPLE LIKE THIS IN CHARGE? :wtf:
IF THE DEBT IS PAID BACK, THEN GO FOR MASSIVE TAX CUTS... I WANTED TO THROW THINGS AT THE TV...


...Now, there’s a fascinating problem. The 2001 tax cut was a very unusual tax cut in the sense that it confronted, for the first time in 150 years, the possibility that we would actually eliminate the debt in the United States. And it was that concern which creates major problems with respect to accumulating assets. When you have $500 billion surpluses, when the debt is effectively zero, creates huge holdings of private assets by the federal government, and for reasons I express in the book, I think that’s very bad idea, and I must say, Bill Clinton agreed with me on that issue... http://www.msnbc.msn.com/id/20941413/page/4/

HE IS AS MUCH THE ARCHITECT OF OUR CURRENT ECONOMIC MESS AS MR. BUSH... SORRY, NO MEA CULPA FOR YOU MR. GREENSPAN

[pnwmom]

1. If Bill Clinton agreed with him then why did he reduce the debt to zero?

Alan Greenspan is the jerk that everyone was always crediting with Clinton's success. But Greenspan's ideas certainly didn't help Bush accomplish anything.

[Freddie Stubbs]

2. Clinton did not reduce the national debt to zero

He eliminated the deficit, not the debt.

[pnwmom]

5. I'm referring to Greenspan's own statement. He contradicts himself.

"When you have $500 billion surpluses, when the debt is effectively zero"

[fasttense]

12. If Clinton did not reduce the national debt to Near zero,

then why does, and did, Greenspan go around warning everyone about how awful a zero national debt and surplus would be? I get this from freepers all the time. They say that Clinton never created a surplus, that it was all smoke and mirrors. Well, then why did Greenspan go around, and is still going around, saying things like this:

"The 2001 tax cut was a very unusual tax cut in the sense that it confronted, for the first time in 150 years, the possibility that we would actually eliminate the debt in the United States. And it was that concern which creates major problems with respect to accumulating assets. When you have $500 billion surpluses, when the debt is effectively zero."

The freepers can never answer the question that if Clinton hadn't for all practical purposes eliminated the national debt, then why did Greenspan go around warning about how awful a surplus (in this case a $500 billion surplus) and a zero debt would be for the nation.

[TreasonousBastard]

3. Slow down for a second here...

For one thing, while Greenspan knows a lot more about this stuff than I do, I'm not sure we were in any danger of completely paying down the debt. I'm also not all that sure about the massive surpluses-- there's too much off-budget fooling around to believe that.

But, he does have a point about not paying the debt down too fast. As long as the debt can be responsibly rolled over and paid down a bit, the cash on hand is really better spent being spent or invested.

If you've got a 5% mortgage and you win the lottery, does it really make sense to just pay off the house right now? Sure, you could do that and get one more bill out of the way, but there's a lot to be said for having a nice bundle of cash to play with.

On edit...

That was then. The mess we're in now is omething completely different. And it is one hell of a mess, not entirely due to Greenspan.

[sam sarrha]

4. because you dont want to PISS OFF the banking mafia..

[krispos42]

6. Of course it's a bad idea

The top 1% would lose hundreds of billions of dollars a year in income!

$400 billon is paid years on interest on the national debt. The interest is paid to the holders of the debt, most of which is held by the top 1% of income earners in this country. Pay the debt off, and they will be losing tens of thousands of dollars a year, or more!

Oh, and the interest they collect for loaning the government money to cover their (the top 1%'s) giant tax-cutting policies? Well, it's considered a special catagory of personal income and is only taxed at 15%.

So paying of the national debt would require a) taxing the rich, and b) denying the rich a source of income taxed at a low percentage rate. Ergo, it's a bad idea.



What's that you say, what about the bottom 99% of the country?

Ha ha ha ha ha! In Washington, you don't exist, foolish little (wo)man! Money equals free speech, so the more money you have, the more free speech you have! The top 1% has like 60% of the money, ergo they have 60% of the free speech. And, since majority rules, you're fucked.

Thanks for playing Reaganomics Democracy! And don't thing too much about what's trickling down onto YOU!!!

[kenny blankenship]

7. Fed Governors, Fed Chairmen represent who? Who do they represent?

Do you vote for the Fed Board of Governors? No. They don't come from nowhere though. Their names aren't picked out of phone books at random. They come from the world of Wall St. banks and they represent the BANKS. They don't represent heavy industries, Mom & Pop retailers, small businessmen, home owners, nor renters, nor workers, nor you, they represent banks.

Can banks make money if people are not taking on debt? Can they make money if people (or the People of the United States of America) retire all their old debt, pay it off? No they can't.

The Federal Reserve Chairman will always castigate our political leaders for their "loose" behavior with the national credit card, and news networks and print journalists will always relay their chastising words with a deferential hush. But you will never hear one of these high priests advocating the idea that the nation should works towards being FREE of debts. No, that would NOT be a good thing in their view, and naturally, because their sole constituency and the only people they are concerned about make their wealth and wield their power by virtue the indebtedness of the nation at large.

[JCMach1]

8. Exactly, Greenspan did fuel government and consumer

debt overload.

And then kept inflation artificially low to keep bank profits up...

Inflation and the weaker dollar will eventually strengthen the consumer going forward from this crisis. However, the Federal Reserve Goons will most likely tighten monetary policy once the crisis has passed.

So, the push to wage slavery will continue.

[silverback]

9. If we all paid off our debt...

The money supply would dwindle to zero, long before we were debt free. Credit IS money.

That's the result of loaning the currency into existence at interest (which is what the FED does)

The total debt burden in the economy must always increase.

Greenspan is right, but the WHY isn't what he's saying it is.

Paying off the national debt absent some kind of fundamental monetary reform would result in deflation and recession if not depression unless the private sector took on an equal amount of debt.

Bill never actually balanced the budget, the national debt increased every year, and the unfunded liabilities of SS and medicare increased by a LOT even in his best year. (they were spending the SS surplus)

Still it was much better back then than now, but then we were in the midst of the tech bubble and at peace.

[piesRsquare]

10. B-b-b-b-b-b-b-b!

I don't understand this stuff...I feel like my brain just blew a fuse.

All I know is that if I won the lottery, I would wipe out every penny of my debt and make any immediate purchases with cash. I'd invest the bulk of the winnings and hire someone else to manage it. If I had a 5% mortgage, I'd pay off the house immediately--penalties and all. Screw credit, financing, etc. It's just too damned complicated for me, and I'm tired of "loose ends".

I have AD/HD. I need to keep things simple.

[JCMach1]

11. Also, Greenspan would say the gov. would be sucking up too much cash

that simply won't work. IF they spent it all, that would be highly inflationary.

However, that would be the time you could offer massive tax cuts... i.e. once there was complete financial order at the Federal level.

[Toots]

14. If I ran my business like you sugest I wouldn't have one long

Your money supply does not run out if you eliminate debt. Your money supply comes from taxation. Your debt comes from spending more than you bring in. There are times when a big project is needed and bonds need to be sold to finance it. You don't run a country by going in debt though. That is just plain foolishness..

[Javaman]

21. silverback strikes me as a recently converted repuke...

he or she needs time to shake off the last bits of repuke crud before they see everything for what they really are.

[Javaman]

20. "Bill never actually balanced the budget, the national debt increased every year"

Sigh. Please do your reseach.

I will cut you slack because you are new, you also could be a closet fundie, but be that as it may, please check out this link...

http://www.lafn.org/politics/gvdc/Natl_Debt_Chart.html

you will see that the national debt clearly DECREASED under Clinton.

[REP]

13. I'm Reading Greenspan's Book. He's An Idiot.

I'm reading it for a friend, and boy does he owe me. Anyway, once you get over the I'm-so-smart-and-darlingness of his writing and read about his economic theories, I've realized that I know more about economics and economics theory than this gibbering moron does, and that's not saying much. He misunderstands so much, understands human nature so little and is so impressed with himself it's a wonder we're not in worse shape than we are.

[Skidmore]

15. Greenspan is an Ayn Rand anarchist who would seek to kill off the poor

of the world if he could get by with it. The man is no wizard and has always been a self-serving suckup to the wealthy class.

[newportdadde]

16. Why pay it off when you can inflate it away?

[SoCalDem]

17. Greenspan called himself a LIBERTARIAN republican

and yet he was allowed to manipulate our whole economy thoughout SIX presidencies.. THAT's the stooooopid part..

[karynnj]

18. He ignores that it was not even true that we had a real surplus

The budget uses excess revenue that comes in via FICA that was suppose to be to insure SS had enough money when the baby boom hit those years as revenue, but does not add the amount to the costs and put it away for the future. I heard Greenspan speak a few years ago where he simply said that the assets in the trust fund were not real - they were spent.

This is unbelievably cynical. What it means is that all of us paid higher FICA taxes to subsidize the Reagan tax cuts that happened near the same time. This substituted a more regressive tax for the progressive income tax.

It brings back memories of Gore's lockbox, that the media had so much fun with. Greenspan's comment that he feared too little debt and thus maybe was for the Bush tax cuts shows that he was willing - for all intents and purposes - to give that fund away mostly to the rich - and then declare (in concept) "Get real, that money is gone."

[La Lioness Priyanka]

19. i wanted to slap him yesterday too.