Greenspan: Time to Hit the Brakes on Federal Spending
Kathryn Nix /
Many Americans mistake the United States’ capability to borrow money as an indicator that our nation is incapable of incurring the same fiscal mess Greece currently finds itself in. In reality, this isn’t so, and this mentality could prove dangerous for America’s future if used to placate lawmakers regarding the actual state of our fiscal house. Former Federal Reserve chairman Alan Greenspan explains in an article published today in the Wall Street Journal that subdued long-term interest rates are “fostering a sense of complacency that can have dire consequences.”
But the crisis is real. In the past 18 months, the federal debt has surged from $5.5 to $8.6 trillion, and spending by Congress continues as if money grew on trees in Washington.
Writes Greenspan, “The current federal debt explosion is being driven by an inability to stem new spending initiatives. Having appropriated hundreds of billions of dollars on new programs in the last year and a half, it is very difficult for Congress to deny an additional one or two billion dollars for programs that significant constituencies perceive as urgent. The federal government is currently saddled with commitments for the next three decades that it will be unable to meet in real terms. This is not new. For at least a quarter century analysts have been aware of the pending surge in baby boomer retirees.”