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Obama Wars Title: Greenspan Says U.S. May Soon Reach Borrowing Limit Greenspan Says U.S. May Soon Reach Borrowing Limit By Jacob Greber - Jun 17, 2010 Former Federal Reserve Chairman Alan Greenspan said the U.S. may soon face higher borrowing costs on its swelling debt and called for a “tectonic shift” in fiscal policy to contain borrowing. “Perceptions of a large U.S. borrowing capacity are misleading,” and current long-term bond yields are masking America’s debt challenge, Greenspan wrote in an opinion piece posted on the Wall Street Journal’s website. “Long-term rate increases can emerge with unexpected suddenness,” such as the 4 percentage point surge over four months in 1979-80, he said. Greenspan rebutted “misplaced” concern that reducing the deficit would put the economic recovery in danger, entering a debate among global policy makers about how quickly to exit from stimulus measures adopted during the financial crisis. U.S. Treasury Secretary Timothy F. Geithner said this month that while fiscal tightening is needed over the “medium term,” governments must reinforce the recovery in private demand. “The United States, and most of the rest of the developed world, is in need of a tectonic shift in fiscal policy,” said Greenspan, 84, who served at the Fed’s helm from 1987 to 2006. “Incremental change will not be adequate.” Rein in Debt Pressure on capital markets would also be eased if the U.S. government “contained” the sale of Treasuries, he wrote. “The federal government is currently saddled with commitments for the next three decades that it will be unable to meet in real terms,” Greenspan said. The “very severity of the pending crisis and growing analogies to Greece set the stage for a serious response.” Yields on U.S. Treasuries have benefitted from safe-haven demand in recent months because of the European debt crisis, a circumstance that may not last, said Greenspan, who now consults for clients including Pacific Investment Management Co., which has the world’s biggest bond fund. Benchmark 10-year Treasury notes yielded 3.20 percent as of 12:11 p.m. in Tokyo today, down from the year’s high of 4.01 percent in April and compared with as high as 5.32 percent in June 2007, before the crisis began. Yields have remained low “despite the surge in federal debt to the public during the past 18 months to $8.6 trillion from $5.5 trillion,” Greenspan said. The swing in demand toward American government debt and away from euro-denominated bonds is “temporary,” he said. “Our economy cannot afford a major mistake in underestimating the corrosive momentum of this fiscal crisis,” Greenspan said. “Our policy focus must therefore err significantly on the side of restraint.” Post Comment Private Reply Ignore Thread Top • Page Up • Full Thread • Page Down • Bottom/Latest Although a 'bubble' in home prices for the nation as a whole does not appear likely, there do appear to be, at a minimum, signs of froth in some local markets where home prices seem to have risen to unsustainable levels." Alan Greenspan, June 9, 2005
#2. To: Badeye (#0) Previoulsy posted, douchebag... #67. To: war (#48) Keep hiding behind the bozo, bozo. (laughing) You've always been a world class pussy. Badeye posted on 2010-01-14 16:12:48 ET Reply Trace I'm biased, obviously, given the shit I'm subjected to daily here from the anti groupie. Badeye posted on 2010-06-10 11:34:31 ET Reply Trace Private Reply #3. To: go65 (#1) Former Federal Reserve Chairman Alan Greenspan said the U.S. may soon face higher borrowing costs on its swelling debt and called for a “tectonic shift” in fiscal policy to contain borrowing. Just 10 days prior to the explosion, the Obama administration’s regulators gave the oil rig a pass, and last year the Obama administration granted BP a National Environmental Policy Act (NEPA) exemption for its drilling operation. Top • Page Up • Full Thread • Page Down • Bottom/Latest |
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