Tilted Forum Project Discussion Community - View Single Post - "Is Greenspan Trying to Engineer a Bush Defeat?

james t kirk · 02-28-2004, 08:23 AM

Greenspan is a registered republican.

But he did 8 years under Clinton because Clinton knew he (greenspan) knew just what the hell he was doing.

Bush Sr. and Greenspan butted heads over deficit financing.

Bush Jr. is too stupid to be able to go toe to toe with Greenspan.

Greenspan abhors deficit financing (and rightfully so.)

W has been spending money like a drunken sailor with little or no regard to the long term economics of it all. This year's US deficit is a record 521 billion, though in terms of percentages of GDP is not quite a record (yet). Rompin Ronnie Raygun holds that distinction.

But, the 200 billion or so spent on Iraq is NOT included in that 521 billion (why I don't know.)

So the US deficit is massive and Greenspan is rightfully concerned.

At the current time the US treasurery is printing up money to cover the deficit without having the assets to back up the debt. As a result, the US dollar has been decreasing in value rather dramatically on the international market. The Euro is at record levels.

Right now the overnight rate in the US is at 1% which is quite low, almost free money in fact.

If the US keeps up its current strategy of printing up money, there will come a time when a US currency crisis could happen. Since there are no investors willing to invest their money for a crumbie 1%, you don't have the bonds to borrow against now. Investors will demand more than 1% return on their money.

Unless the US wants to continue to print up more money and further devalue their currency, Greenspan will have no choice but to raise interest rates (rather shockingly) in order to attract investors.

When that happens the amount of tax dollars going to service JUST the interest on the debt (the sum of all deficits) will be incredible and will take away the US government's ability to spend tax dollars on other Government programmes such as that big honking military.

Something has to give.

There aint no thing as a free lunch, and you can kid yourself about Bush being a great guy and helping the economy, but nothing could be further from the truth.

He is just using purely short term economics and mortgaging the future.

No, if the US doens't get its spending under control we are in for another depression in 4 to 8 years.

02-28-2004, 08:23 AM	#6 (permalink)
james t kirk Junkie Location: Toronto	Greenspan is a registered republican. But he did 8 years under Clinton because Clinton knew he (greenspan) knew just what the hell he was doing. Bush Sr. and Greenspan butted heads over deficit financing. Bush Jr. is too stupid to be able to go toe to toe with Greenspan. Greenspan abhors deficit financing (and rightfully so.) W has been spending money like a drunken sailor with little or no regard to the long term economics of it all. This year's US deficit is a record 521 billion, though in terms of percentages of GDP is not quite a record (yet). Rompin Ronnie Raygun holds that distinction. But, the 200 billion or so spent on Iraq is NOT included in that 521 billion (why I don't know.) So the US deficit is massive and Greenspan is rightfully concerned. At the current time the US treasurery is printing up money to cover the deficit without having the assets to back up the debt. As a result, the US dollar has been decreasing in value rather dramatically on the international market. The Euro is at record levels. Right now the overnight rate in the US is at 1% which is quite low, almost free money in fact. If the US keeps up its current strategy of printing up money, there will come a time when a US currency crisis could happen. Since there are no investors willing to invest their money for a crumbie 1%, you don't have the bonds to borrow against now. Investors will demand more than 1% return on their money. Unless the US wants to continue to print up more money and further devalue their currency, Greenspan will have no choice but to raise interest rates (rather shockingly) in order to attract investors. When that happens the amount of tax dollars going to service JUST the interest on the debt (the sum of all deficits) will be incredible and will take away the US government's ability to spend tax dollars on other Government programmes such as that big honking military. Something has to give. There aint no thing as a free lunch, and you can kid yourself about Bush being a great guy and helping the economy, but nothing could be further from the truth. He is just using purely short term economics and mortgaging the future. No, if the US doens't get its spending under control we are in for another depression in 4 to 8 years.