Alan Greenspan: Economy will 'fade' dramatically because of entitlement burden
cnbc.com
cnbc.com
However, based on Rand's writings on ethics and capitalism it would be immoral to accept the Fed chairmanship unless you had an explicit charter to shut it down which was obviously not the case for Greenspam. Rand would have denounced Greenspam in no uncertain terms but she was dead.
Accepting the Fed position was an explicit repudiation of Rand's philosophy and views on capitalism regardless of Greenspam's prior association with Rand. It was also an implicit repudiation of the articles (especially the article on gold) that he wrote in Rand's anthology "Capitalism: The Unknown Ideal" in which Greenspam authored three articles; "Antitrust", "Gold and Economic Freedom", and "The Assault on Integrity". He is no more a "randian" than my mom, though he is dotty and old.
Greenspam would have been wise to read and heed an article written also in Rand's book on capitalism; "The Anatomy of Compromise" in which she explains the principle of Sanction. Rand wrote;
> In any collaboration between two men (or two groups) who hold different basic principles, it is the more evil or irrational one who wins.
Greenspan chose to collaborate with dishonest bankers, currency cranks (in the Fed) and bureaucrats (in the bank regulators) who wanted make it possible to "somehow" inflate the currency, give loans to the unqualified and to back quasi-private debt (Fannie Mae and Freddie Mac) with govt guarantees all without consequences. He thus set the stage for the 2008 mortgage banking crisis.
Funny that he'd lay the blame on entitlements when it could just as easily be laid on out-of-control military spending with the Terrorism boogeyman cracking the whip. Why, because neither the Republicans nor Democrats can keep their entitled noses out of other countries' (or their own citizens') business. There's no way to reverse that and the politics are truly awful.
The bigger problem is that the American people have collectively decided that debt simply doesn't matter. Congress and the President pass budgets with eye-popping deficits. The Tea Party and its calls for fiscal restraint are as good as dead. Sanders, Warren, and the left wing of the Democratic party are on the ascendency and will do everything they can to implement programs with high price tags. Republicans will block any attempt to raise taxes to pay for it all. The Federal Reserve has decided to pull the plug on quantitative tightening, making it that much easier for Congress to balloon the national debt.
Greenspan bears major responsibility for this mess. His complicity in letting asset bubbles inflate well beyond control, and his rush to paper over the resulting mess leads us where we are today. A financial house of mirrors where bullshit passes for money and only the poor get hurt for their financial stupidity.
But America has privileges and unfortunately, time and again, those have been abused.
The only and only thing stopping this Trainwreck from collapsing is being the reserve currency. The future will be a story to tell in economic textbooks of the future.
Out of control military spending? As a percentage of GDP military spending has had an overall downward trend since the Korean War. Measuring in terms of dollars does not account for overall growth of the economy. There's nothing "out of control" about US military spending.
I think it would be easy to support the assertion that military spending is out of control. Just because it was worse in the 60s doesn’t mean it isn’t wrong now. Our military has very sloppy accounting and has lost a couple trillion dollars, but we keep handing them 3/4 a trillion a year and rising. The amount of potential other projects which would be extremely useful for the populace, and we could find with just last year’s increase of over $50 billion, is staggering. Not to mention, a good portion of this is borrowed money. Military activities continue to create pollution that we’re going to have to clean up in the future. Given the government’s other financial obligations that are going underserved such as infrastructure and health care, it’s obvious fiscal irresponsibility, to say the least.
I’m all for being able to defend ourselves. I would feel a lot better if I felt like our resources were being well spent all around.
Even adjusted for inflation, United States military expenditures have risen by over six times since the 40s. Calling it a “consistent reduction over time” is fairly ludicrous. That the rest of the economy has expanded more isn’t really relevant to my point of view. We spend three times as much is the nearest other country, every year. I don’t really care if it’s “out-of-control”, but I am concerned that it’s clearly excessive. Regardless of what the GDP is, we could be spending the vast resources to the tune of $300 billion and tens of thousands of employees on something else.
My point is that we spend hundreds of billions wastefully and direct a vast amount of resources in directions that are not beneficial or useful. This has nothing to do with percentages of GDP. It’s also a very high percentage of government expenditures while when the government has been running deficits and been in debt for decades.
You seem to be quoting me as saying that I consider all military spending to be wasteful. No, I consider the wasteful military spending to be wasteful, such as when they spend billions of dollars develop an aircraft that never functiona, needlessly pollute instead of disposing responsibly, which requires billions of dollars of clean up, or lose track of $2 trillion. Would you say those things are not wasteful, or are necessary for national defense?
Next, the figures you’re talking about don’t include the cost of wars.
Also, you are comparing to the times that we had a serious hostile geo- political rival that was considered to be our equal, and engaged in a military spending contest. Of course relative military spending has decreased since the 1960s - the USSR outspent us at times, now China, our closest rival, is at 25%. A GDP relative decrease does not mean it is not still excessive, and I don’t care whether it is “out of control”.
You seem to have some concept that we need to compare to the past to determine whether the present is acceptable. I don’t see why that makes any sense.
Our military spending as a percentage of GDP has dropped by roughly 4x since the 1960s. From around 12% to around 4%. In no way can a reasonable person describe our military spending as "out of control".