Alan Greenspan on Trump and globalism

globalization is a very major source of forward motion

Video clip starts at 3:15:

Published on Nov 9, 2016 Evan Davis spoke to the former president of the Federal Reserve, Alan Greenspan. What’s his reaction to the result of the US presidential election – and Donald Trump’s victory?

Evan Davis: Do you think looking back on the last 30 years, globalism… for want of a better word, went too far?

Alan Greenspan: No, I do not. I think that globalization is a very major source of forward motion.

At the Conference on Bank Structure and Competition, sponsored by the Federal Reserve Bank of Chicago, Chicago, Illinois May 6, 2004 Remarks by Chairman Alan Greenspan Globalization and innovation

Entitlements

Greenspan agrees with the President of the “Council on Foreign Relations” about entitlements.

Social Security alone consumes nearly a quarter of the federal budget. [1]

“The soaring costs of entitlement programs, including Social Security and Medicare, must be reined in. If we don’t bring that under control, everything else we’re doing is irrelevant.” [2]

Advice to Congress

Dr. Haass, President of “Council on Foreign Relations”, is the author or editor of twelve books on American foreign policy and one book on management. His next book,  A World in Disarray: American Foreign Policy and the Crisis of the Old Order, will be published in January 2017 by Penguin Press. His advice to Congress:

United States public debt is fast approaching $14 trillion. It is now equal to roughly 75 percent of gross domestic product (GDP) and in a decade will reach between 80 and 90 percent of GDP. Depending on spending and revenue assumptions, it is a matter of when, and not if, debt comes to exceed GDP. This could well happen by 2030.

The mounting debt problem will not only not fix itself but will grow worse. To help relieve the debt burden, the United States will need to reform entitlements including Medicare, Medicaid, and Social Security; avoid “false solutions” from Congress, such as the sequester and failing to raise the debt ceiling; and increase economic growth in the United States through education, infrastructure, immigration, and tax reforms.[3]

Score card on US debt and consequences by “Council on Foreign Relations”

The U.S. government faces an unsustainable long-term debt trajectory. The danger zone for U.S. debt is in the long term. At its current rate, the U.S. debt-to-GDP ratio will be higher than all G7 countries except Japan by 2040.

While other large wealthy countries have been cutting their entitlement programs, the United States has left Medicare and Social Security mostly untouched. Recent U.S. budget cuts have instead focused on discretionary spending, which goes toward areas such as education, infrastructure, and research and development—all of which constitute investments in future economic growth.

…entitlements will account (along with interest payments) for nearly all new federal spending in the future.

Getting U.S. public debt on a sustainable path will require more sacrifice from the American public. Ideally, the debt-reduction burden would be shared by all Americans. But one thing is certain—less generous entitlement programs and tax increases will need to be part of any balanced solution.

The politics of reform may be easier to manage if a crisis hits. But the public will be better off if the tough, long-term debt-reduction decisions come sooner rather than later and are guided by prudent planning rather than reaction to a crisis.