Greenspan argues for boosting savings
Fed chairman Alan Greenspan, in a Senate hearing
Tuesday, warned of serious economic consequences unless growth in Social
Security and Medicare is not restrained.
According to government projections, spending on
Social Security and Medicare will rise from 8% to 13% of the total economy.
"These projections make clear that the federal budget is on an unsustainable
path," Greenspan said. Although the President Bush's plan to allow younger
workers to invest a small portion of their social security in private accounts
will not, according to Greenspan, address solvency concerns, it would be a
mistake to focus entirely on solvency. Greenspan argued that boosting savings
would also be very important. That, he insisted, must be "at the top of the list
of any solution." "Anything that we can do to raise personal savings is very
much in the interest of this country."
This is the closest Greenspan has come
to acknowledging the debt problem faced by America. Of course, he mentions
nothing about debt. But claiming that savings requires boosting implies there is
too much consumption and debt in the economy.
Posted: Wed - March 16, 2005 at 02:09 AM