beyond_atlantic (beyond_atlantic) wrote,

Greenspan alert(notify)

NOUVELOBS.COM ¦ 02.12.05 ¦ 18:04

If the statistics of the month are good, the president of Federal Reserve Alan Greenspan warns on the risk, in length-term, of the American budgetary imbalance.

Alan Greenspan ( AP)

L be good short-term perspectives of the American economy do not have to make the budgetary imbalance forget which represent "significant" long-term risks, declared on Friday, December 2nd the president of the federal Reserve Alan Greenspan.
The leader of the American central bank, the mandate of which expires in January, considered that " the budgetary position of the United States will deteriorate(aggravate) strongly in the years to come if no strong measure of budget cut is taken ".
" After all, the consequences of an inactivity on this file could be grave for the American economy ", he added in a speech prepared with the aim of an intervention during a conference organized by Fed of Philadelphia.
Greenspan pronounced in favour of the restoring of the rules of budgetary limitation of the Congress, while underlining that they would not be enough for them only to fill the growing deficits provoked by the arrival to the age of the pension(retreat) of the generation of the baby boom.
The solution cannot either pass by increases of taxes, he pursued.

" Increases of taxes of the necessary dimension to face our budgetary difficulties would contain significant risks for the economic growth and the base of incomes ", he said, reaffirming his(her,its) conviction for which the government has to look " to reduce the budget deficit mainly, if it is not completely, by reductions of spending(expenses) ".

Outspokeness against discretion

The outspokeness of Greenspan on the budgetary questions contrasts with the discretion of his(her) indicated(appointed) successor, Ben Bernanke, who let know in November that he would refrain from specific recommendations on the fiscal and budgetary policy of the government.
Interrogated about this point during his hearing(audition) of confirmation to the Senate, Ben Bernanke, indicated(appointed) in October, asserted that these questions were not of his(her,its) spring.
The banking Committee(Commission) of the Senate pronounced in favour of its appointment and this one must be again confirmed by the high assembly in plenary session. Greenspan, in post(post office) for 18 years, leaves its functions(offices) on January 31st.
The president going out of Fed, the statements(declarations) of which were registered(recorded) in advance because he is on Friday in London for the meeting of G7, underlined that the economic activity in the United States increased with a " rather good rhythm " in the approach of 2006, in spite of the disturbances caused by hurricanes at the end of the summer.
He warned however that " this period of relative stability will soon come to an end " because of the ageing of the population.
" I am afraid that we already promised more physical resources to the generation of the baby boom, for his(her,its) years of pension(retreat), than that the economy has the means to give(look) ", he said, adding that it was better to reform " rather early than late " the system of help(assistant) to the old persons ( Social Security).
The increase of the national rate of saving is another mattering means to meet the needs of pensioners " without restricting excessively the standard of living of our population in age to work ", he said. (Reuters)
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