Alan Greenspan is doesn’t feel good about America. In an interview with Bloomberg TV’s Tom Keene and Mike McKee on Tuesday, the former Federal Reserve chair laid out an uncertain and downbeat view of the US economy.
Alan Greenspan is doesn't feel good about America.
In an interview with Bloomberg TV's Tom Keene and Mike McKee on Tuesday, the former Federal Reserve chair laid out an uncertain and downbeat view of the US economy.
McKee asked if Greenspan thought that financial markets were right by signaling trouble for the economy.
"Yep," said Greenspan. "We're in trouble basically because productivity is dead in the water."
"Let's put it this way. Output per hour is driven by real capital investment ... Real capital investment is way below average. Why? Because business people are very uncertain about the future."
Later in the interview, McKee asked if Greenspan was optimistic going forward and Greenspan put it simply, saying, "No, I haven't been for quite a while."
"And I won't be until we can resolve the entitlement programs. Nobody wants to touch it, but it's gradually crowding out capital investment, and that's crowding out productivity, and that's crowding out the standards of living. Where do you want me to go from there?"
Greenspan seems to be concerned over the fact that both healthcare and retirement are taking up large portions of government, and private businesses, expenses which in his opinion is holding down other investments.
Additionally, Greenspan felt that the current global economy is incredibly uncertain. He said that productivity collapse in China could lead to a rough landing for the country, and when asked by Keene about a possible back and forth between the Chinese Renminbi and the US dollar, Greenspan admitted to befuddlement.
"This is where the issues lie. I don't know the answer to that," said Greenspan. "The United States unquestionably, the US dollar unquestionably, is the firmest currency in the world of the major countries. It's hard to see where it goes from here there are so many unknowns. Which, in my experience, I've never seen so many unknowns."
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