Saturday, November 20, 2004

Don't Trust the Times!

In this post I relied on the Times story. Turns out, I should have been more skeptical. Via Brad Delong, the CNN story, which reports that
Greenspan said it is therefore important that the U.S. budget deficit be cut, a move that would reduce the current account deficit.

"Reducing the federal budget deficit (or preferably moving it to surplus) appears to be the most effective action that could be taken to augment domestic saving," he said. "Corporate saving in the United States has risen to its highest rate in decades and is unlikely to increase materially. Alternative approaches to reducing our current account imbalance by reducing domestic investment or inducing recession to suppress consumption obviously are not constructive long-term solutions."
. So scratch my last post: Greenspan isn't a total fool, he realizes that the budget deficit has to be cut too. Which makes one wonder how the Times could cite anonymous analysts saying that this should be viewed as helpful to the Bush Administration.


Anonymous Anonymous said...

I'm sorry I just can scratch the last post. I tried. You only get one chance in blogdom and its there.
How could you not think that Greenspan (who takes a compreshensive, multifacited, mulitvariable approach to everything) would not include cutting the budget deficit. Listen to Andrea Mitchell's (NBC News and Al's wife) comments on IMUS from time to time and your get some hidden insigts into Greenspan. Hope all is well in your studies. My regards to all.

9:32 PM  

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