Greenspan: Fix Social Security, Medicare, Deficit

Fox News ^

[Republican Red]

Federal Reserve Chairman Alan Greenspan (search) said Wednesday the U.S. economy is growing at a "reasonably good pace" but urged Congress to move quickly to fix the country's budget deficits and its Social Security and Medicare problems.

"Addressing the government's own imbalances will require scrutiny of both spending and taxes. However, tax increases of sufficient dimension to deal with our looming fiscal problems arguably pose significant risks to economic growth and the revenue base," Greenspan said in testimony prepared for delivery to the House Budget Committee (search).

"The exact magnitude of such risks is very difficult to estimate, but, in my judgment, they are sufficiently worrisome to warrant aiming, if at all possible, to close the fiscal gap primarily, if not wholly, from the outlay side."

Greenspan again endorsed the key part of President Bush's Social Security (search) overhaul to set up private accounts, but he stressed that much more needed to be done to put the giant retirement program and Medicare, which he said faced even more severe financial strains, on a more sound footing.

Last month, the Fed chairman had urged a go-slow approach on the narrower issue of allowing younger people to put a portion of their Social Security payroll taxes into personal retirement accounts.

......

Greenspan reiterated that he supports President Bush's push for setting up personal retirement accounts by diverting up to 4 percentage points of payroll taxes into the new accounts.

Diverting the payroll taxes into the Social Security trust fund, he said, had merely allowed the government to run larger budget deficits. Greenspan said that switching to the private accounts would be a way to bolster the nation's low savings rate.

Greenspan warned Congress that every year it delayed would make fixing the problem harder, especially after the baby boomers begin retiring.

[Republican Red]

Looks like Alan will be sleeping on the sofa for awhile. Andrea will not like this one bit.

[stopem]

When Greenspan speaks it seems people don't listen all that much anymore they need new young blood in that position.

He is flipflopping to much lately, last time he said he disagreed with the SS reform and now it's a crisis again.

[Piquaboy]

I am sure that the Rats went deaf when he mentioned it a good idea to partly personalize Social Socurity.

[Cyclopean Squid]

He never disagreed with the SS reform. He advised that lawmakers not rush into it, but always expressed support for the President's plan (including the hot-button issue of the personal accounts).

[econ_grad]

Greenspan needs to wait because Frist has Presidential aspirations and he is not going to screw it up by doing something sensible and conservative.

[Teplukin]

Obviously, the solution is to gradually privative SS until it becomes the equivalent of a 401K retirement plan.

It is time to start downsizing all the government. The government has become a bloated leviathan, upon which too many non-productive leeches feed. If a person can't survive in this country w/o a check from the gov't, then they should get out of here & move to Socialist Ireland.