More on Greenspan
Scary. Is the one word to describe the lack of intelligence many members of the House Committee on Financial Services displayed in their questioning of Mr. Greenspan today. It was almost as if they had no idea what to ask about. Greenspan articulately answered questions which basically had no factual basis. He also fielded angry democratic banter, which predominantly made absolutely no sense. This disgusts me, especially coming from that side of the line.
In his second day of testimony on Capitol Hill. Greenspan was resolute, intelligent, and patient. As I said in my last blog, he displayed a vigilance in maintaining his opinion that we have a dire need to keep an eye on the increases in spending congress continues to make. Higher debt = problems in the future. Education = the future of our nation. Foreign investment is not so much a risk, but rather the propensity for Americans to invest in our OWN debt instruments presents a much more pertinent problem. Education is pivotal to the future of our great nation. He reiterated again that education is the only way to address inequality across the board. He stated that education is almost the most important issue we should be discussing.
There is one thing that I would like to point out to my general audience, which almost all of the members of congress missed. The Social Security fund is NOT liquid cash. The fund is generally retired into some kind of long-term treasury instrument, most often times a special flavor of bond desgined specifically for SS. But, congress is allowed to borrow against SS as it wishes. So, essentially they have this huge (1.5 trillion $ huge) pot of coin to borrow against. Just like when you or I have a large chunk of coin sitting in our savings account, or just like a credit card, you will think about spending that money. Groups behave the same way. So, Greenspan was resolute in pointing out that the privatization of these funds is a way to guarantee that this capital is pulled out of the federal budget pool. This can be pivotal to guaranteeing reduction in captial spending by congress. In turn guaranteeing a debt reduction. Which, he pointed out several times to be the most important issue facing the current adminstration. Let me repeat…debt REDUCTION.
In addition, privatization guarantees that the retirement system will be fully funded. As he pointed out, any retirement system needs to be fully funded. With congress borrowing heavily against the current SS system and the general reduction of incoming funds starting in 2008, we as a country face a significant decrease in the availability of funding for retirement. By shifting towards a privatized account system, it virtually guarantees funding of the retirement system. This is predomintantly due to the generally assumed fact that people tend to put money away adequately for the future.
There will undoubtedly be more on this from me as the issue heats up…;)
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