Greenspan Delivers Upbeat Forecast on Economy and Jobs (Democrats being sent to ICU)

Newsmax ^ | 11/6/03

[areafiftyone]

WASHINGTON - Federal Reserve Chairman Alan Greenspan delivered an upbeat assessment of economic prospects, saying Thursday the odds "increasingly favor" a revival in job growth.

However, he warned about long-term threats posed by the soaring federal budget deficit. If that red ink is not brought under control by the time Baby Boomers start retiring, it could have "notable, destabilizing effects" on prospects for growth in the future, he said.

In the debate over how to fix the deficit problem, Greenspan sided with President Bush and the Republicans, who argue that government spending should be cut to deal with the deficit rather than raising taxes.

On the economy, Greenspan cited a number of favorable recent developments pointing to stronger economic growth and said that even the job market, which has continued to shed jobs this year, seems to be finally turning around.

"The odds ... increasingly favor a revival in job creation," Greenspan said in a speech to the Securities Industry Association. He cited such hopeful signs as the need of businesses to replace inventories, which have dropped to extremely low levels, given the strong buying spree consumers went on during the third quarter.

Low Risk of Inflation

The Federal Reserve has left a key short-term interest rate it controls at a 45-year low of 1 percent. Greenspan repeated on Thursday assurances that the central bank would not feel the need to quickly start raising interests rates at the first signs of economic growth.

Greenspan said that unlike earlier periods of recovery, inflationary pressures were still non-existent. "In these circumstances, monetary policy is able to be more patient," Greenspan said in remarks delivered by satellite to the securities conference in Boca Raton, Fla.

Greenspan noted that consumer inflation was running around 1 percent, such a low level that the central bank still believes that the remote possibility that the country could face a destabilizing bout of deflation, falling prices, outweighs the risks of higher inflation.

Greenspan said the situation was far different from past U.S. history in which, even after recessions, inflation remained at higher levels than the Fed wanted to see.

"As a consequence, with some risk to economic activity, monetary policy typically had to move aggressively in the uncertain early stages of past economic recoveries to ensure that inflation would be contained," Greenspan said.

The Fed chairman said the "relatively optimistic short-term outlook for the U.S. economy" was playing out against a growing concern in financial markets about the surging federal budget deficit.

The Need to Cut Spending

He said it was critical for Congress and the administration to address this problem. He again urged the reinstatement of budget rules that require any future tax increases to be offset by either spending cuts or increases in other taxes. He urged reinstatement of caps on the amount that discretionary government spending could rise in any year.

Greenspan said the nation's budget problems would become even more acute in just five years, when the first wave of Baby Boomers hits the age of 62, the time when about half of prospective Social Security beneficiaries choose to retire early even though it means taking reduced benefits.

The Danger of Democrat Tax Increases

While Democrats have blamed much of the budget woes on Bush's tax cuts, Greenspan cautioned against relying on increased taxes to reduce the deficit.

"Tax increases of sufficient dimension to deal with our looming fiscal problems arguably pose significant risks to economic growth and the revenue base," he said.

Greenspan said that it was difficult to estimate the magnitude of these risks but that they were of enough concern to warrant reducing the budget deficit "primarily, if not wholly, from outlay restraint."

[Mo1]

(Democrats being sent to ICU)

LOL!! in this case .. I think pulling the plug would be a good thing

[RiflemanSharpe]

TDIDS!!!!

[Grampa Dave]

Freepers who work in tall buildings should allow Left Wing Lunatics and the so called conservatives who hate good economic news, access to their "windows":

[jbstrick]

Someine just called RUSH's show and said Gephart is now claiming the Democratic based and supported tax cuts are the reason why the economy is turning around.

I am trying to find a source.

[William McKinley]

TDIDS.

[MJY1288]

I wonder how long before the democrats start bringing up George W. Bush's 30 year old DUI, after all, they have nothing else, and I mean NOTHING

[Mo1]

ROFL!!!

[Mo1]

OK .. what does that mean?

[MJY1288]

A year from now that same cartoon can be used again, accept next time the headline will read "Iraq is Secure and Free"

[areafiftyone]

Hey its funny you said that. I work on the 39th Floor in NYC and our fire alarm just went off. I hate tall buildings for that matter it takes so long to go down the stairs maybe I can show Democreeps the quicker way out.

[Pikamax]

http://www.thehill.com/news/110603/delay.aspx


On CBS’s “Face the Nation,” Gephardt sought to claim credit for tax cuts rather than attacking them. “The Democratic-induced parts of the tax cuts went to the middle class and people got the benefit of that,” he said, “so that helped some.”

The RNC press release noted that Gephardt opposed the 2001 and 2003 tax bills.
Gephardt’s rivals for the Democratic presidential nomination have not curtailed their criticisms, despite the high quarterly growth figure, which remains subject to revision by government economists.

[jmc813]

In the debate over how to fix the deficit problem, Greenspan sided with President Bush and the Republicans, who argue that government spending should be cut to deal with the deficit rather than raising taxes.

Huh? Bush and the Republicans want to cut government spending? News to me.

[sourcery]

"Do not meddle in the affairs of Wizards, for they are subtle, and quick to anger!"

Summoning the usual suspects...

[jmstein7]

BUMP!

[areafiftyone]

Don't think they can do that anymore. DEAN admitted that he drank alot when he was younger. DUI is out for the Democreeps.

[RiflemanSharpe]

Tom Dashal is deeply saddened

[BureaucratusMaximus]

(Greenspan) He said it was critical for Congress and the administration to address this problem. He again urged the reinstatement of budget rules that require any future tax increases to be offset by either spending cuts or increases in other taxes. He urged reinstatement of caps on the amount that discretionary government spending could rise in any year.

Ping! Is Greenspan turning into a small, accountable government conservative? Or is it small talk?

[Republic Rocker]

By that last statement I can assume the nail is in the coffin...TAX INCREASES WOULD DESTROY THE RECOVERY!

Good luck Dim Wits!

[MJY1288]

Didn't Dizzy Dean and a few of the other Nattering Nabobs admit to Marajuana use during their last circle jerk on CNN?

I beleive they called the show "Rock the Vote", It should have been called "Cock-n-Bull"