Yesterday Former Federal Reserve Chairman Alan Greenspan made some sharp comments in an interview on Fox News. I got the feeling this interview was meant as a sort of ‘final words of advice’ from perhaps the most influential economic leader of our era.
Two points from the interview jump out at me. First, he says that if we don’t find the political will to rein in entitlements (and he leaves no indication that he believes that we will find that will) then the entire rest of the leadership discussion is irrelevant. We are headed for economic disaster, plain and simple.
Second, when asked about the choice between Hillary and Trump he said “You leave me with a very difficult choice” and declined further comment.
Social expenditures in the U.S. have increased from 15% of Gross National Product in 2005 to over 20% now and may be headed toward 30% in the next decade. It is simply unsustainable according to Greenspan. Sanders is the only candidate who admits that social expenditures will hit 30% and need to be financed with sharply higher taxes. Greenspan apparently believes that the choice of presidential candidate is irrelevant in the growth of social expenditures. He points out that these expenses are primarily driven by demographic factors, not political process.