Greenspan says entitlements are a "drain" on economy

  • 16 April 2019
  • NormanL

Former Federal Reserve Board chairman Alan Greenspan had some troubling words about what he says could be the biggest drag on U.S. economic growth...entitlements:

The long-time central bank chief repeated his warnings about the weight that Social Security, Medicare and other programs are having on what have been otherwise solid gains over the past few years.

“I think the real problem is over the long run, we’ve got this significant continued drain coming from entitlements, which are basically draining capital investment dollar for dollar,” he told CNBC’s Sara Eisen during a “Squawk on the Street ” interview.

“Without any major change in entitlements, entitlements are going to rise. Why? Because the population is aging. There’s no way to reverse that, and the politics of it are awful, as you well know,” Greenspan added.

While he said the economy looks “reasonably good” in the short run, he expects that over the longer term, growth “fades very dramatically.”

There's no question entitlement spending is a problem. However, that problem is compounded by federal spending practices that further expand entitlements or, as with the progressive's "Medicare for All" proposal, threaten to bankrupt us.

A small amount of fiscal discipline would begin to improve the national balance sheet. So, too, would a clear-eyed look at what entitlements can and cannot do -- and how much they should cost.