Thursday, April 21, 2005

Greenspan Testimony

Alan Greenspan speaks for himself:
But, as the latest projections from the Administration and the Congressional Budget Office suggest, our budget position is unlikely to improve substantially in the coming years unless major deficit-reducing actions are taken.
With spending projected to increase substantially we need to take spending-reducing actions. Neither deficits nor taxes can sustainably increase forever as a share of GDP.
I fear that we may have already committed more physical resources to the baby-boom generation in its retirement years than our economy has the capacity to deliver.
The boomers collectively did not have enough children to fund the retirement they have voted for themselves.
Crafting a budget strategy that meets the nation's longer-run needs will become ever more difficult the more we delay. The one certainty is that the resolution of the nation's unprecedented demographic challenge will require hard choices and that the future performance of the economy will depend on those choices. No changes will be easy. All programs in our budget exist because a majority of the Congress and the President considered them of value to our society. Adjustments will thus involve making tradeoffs among valued alternatives. The Congress must choose which alternatives are the most valued in the context of limited resources. In doing so, you will need to consider not only the distributional effects of policy changes but also the broader economic effects on labor supply, retirement behavior, and national saving. The benefits to taking sound, timely action could extend many decades into the future.
Congress has been able to cut deficits and cut taxes in the past. Can we ever vote for a congress that will successfully cut spending?


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