Posted on 09/15/2010 10:43:51 AM PDT by Fractal Trader
The former head of the Federal Reserve said fiscal stimulus efforts have fallen far short of expectations, and the government now needs to get out of the way and allow businesses and markets to power the recovery.
“We have to find a way to simmer down the extent of activism that is going on” with government stimulus spending “and allow the economy to heal” itself, former Fed Chairman Alan Greenspan told a gathering held at the Council on Foreign Relations in New York on Wednesday.
Bloomberg News Former Fed Chairman Alan Greenspan At this point, “we’d probably be better off doing less than more” because “you’d be far better off to allow the normal market forces to operate here,” Greenspan said. That’s largely because stimulus spending is not proving as effective as many had hoped. “To the extent the evidence suggests very large deficits concurrently crowd out capital investment, there is a debit to the stimulus program that is somewhere between a third and a half of what the gross stimulus is,” he said.
Greenspan was Fed chairman from 1987 to 2006, and was succeeded by current central bank chief Ben Bernanke. Greenspan’s tenure at the Fed was defined by his opposition to government regulation and his confidence that markets would discipline themselves.
To many, the financial crisis was largely born of that ideology, and to some degree, Greenspan has himself said he overestimated the market’s willingness to understand and price for risk. Greenspan has also been widely accused of running an overly easy monetary policy during the early years of the last decade, in turn providing the fuel that powered the housing bubble, the rupturing of which drove the worst recession in generations.
Greenspan’s comments came in response to moderator and audience questions, and were accordingly wide-ranging.
(Excerpt) Read more at blogs.wsj.com ...
“Fiscal Stimulus Worked Far Less Than Expected”
The money was spent, where is it? Someone has to have it.
Wow...if there were a Nobel for understatements he would be on the top of the list.....
Greenspan - the a$$ho!e who said that tax cuts don’t increase revenue.
Hang it up Greenjeans!
The money was spent, where is it? Someone has to have it.
Well, for one, didn’t the major ivy league universities, you know, the commie training grounds, get hefty checks?
Captain Obvious strikes again.
I feel that Greenspan’s intellect is overrated
How dare Greenspan say this about the stimulus. He must hate uncircumcised African men.
“Worked Far Less Than Expected”
a.k.a. “failed”
The money was spent, where is it? Someone has to have it.
Well, we know that $800,000 went to clean foreskin of penises in African males to help prevent the spread of HIV. I am sure that worked. The rest? I don’t know but look for similar projects to appear.
He was like the kid on the front car of a roller coaster claiming to be the engineer driving it.
Now? NOW!? How about they should have done that in the first place instead of the gummint trying to force things and throwing money at its friends??
funny...stimulus failure was fully expected here on freerepublic.
if you mean going into negative digits “far less” then yes, I guess so
Well, the problem is that they didn’t spend enough....
Just saw a Porkulus project in Maryville, TN where they are building a freeway pedestrian overpass WHERE THERE AREN’T ANY PEDESTRIANS! They had to clear a lot of roadside undergrowth near the road just to put it in. There aren’t a lot of houses or shopping or parks or ANYTHING around it!
Tax cuts themselves don’t cause revenues to go up (because if you cut them to 0% you would get 0 income)
It is the fact that we are OVERTAXED and it is draining the economy, that makes tax cuts increase revenue.
Here is how:
Two men in a closed system, one has $100 the other has $0.
The benevolent government steps in to ‘help’ the poor man and takes $40 from the evil rich person to proved ‘welfare’ for the poor man.
RESULT: There is still $100 in the system, and 2 unmotivated workers. The rich man is upset he works so hard and does not get to enjoy his money. The poor man is unmotivated to work since he is getting money for free.
Now take the same 2 workers-
But the rich man HIRES the poor man to build him a boat for $40.
RESULT: There is $140 in the system.
The rich man has his $60 left and a new $40 boat. The poor man has $40 and a job.
Uncle Sam gets to tax $140 in various ways. and it is ALL INCOME TO THE GOVERNMENT
They dont have to take it from person 1 and give it away to person 2, so they can build roads and bridges and stuff, instead of welfare.
That is a grossly over simplified explanation of the dangers of the welfare state and socialism.
Journalists are finally earning their money. The headline doesn't say "unexpected", thanks to some creative writing and the expansion of their vocabulary. My impression from FR is that about 99% of the people here expected exactly what we saw from the stimulus (the other 1% are trolls). The money is gone, and the economy is worse than under predictions for no stimulus.
Off Shore Banking?....for the use of DNC campaigning? UNIONS have been paid off but apparently want more...Oh yes! the teachers demanded and got a pile of money didn't they....ummmmmmm Lavish living at the White House...Uh Huh....ummmmmm Spanish vacations, Bo's trip to Martha's Vineyard? His own plane? Naw...couldn't be. Obama's tax cheating Secretary of the Treasury maybe knows where some of it went....Kenya got a boat load recently.....
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.