On NBC's "Meet the Press" Sunday, former US Federal Reserve Chairman Alan Greenspan actually told the truth. Really. He did! Here's the video.
OK, now play it again. It's short. Watch the reaction of Austan Goolsbee, Chairman of the President's Council of Economic Advisers, after Greenspan spills the beans. He looks like a kid with a poopy in his pants. Priceless.
No Chance of Default, US Can Print Money: Greenspan
Former Federal Reserve Chairman Alan Greenspan on Sunday ruled out the chance of a US default following S&P's decision to downgrade America's credit rating.
"The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default" said Greenspan on NBC's Meet the Press
There you have it, straight from the horse's mouth. Don't you wish you could just print money?
Robert Wenzel is impressed with Alan Greenspan speaking truth to power.
Alan Greenspan Speaks Truth to the Masses About Default
He said he believes the financial markets will react negatively to the downgrade of the US credit rating, and will take "a while" to settle. "Considering the momentum in which the market went down over the last week, it's very unlikely -- if history is any guide -- that this isn't going to take awhile to bottom out."
Most interesting, however, is that Greenspan admitted that Congress, the President were using phony numbers that downplay the deficit problem. Said Greenspan:
This deficit problem that sits out there is much larger than we've been calculating, because the actual numbers employed by those who are calculating the deficits are based on a level of economic activity which we are not achieving.
This is an awesome confession. I have never heard anyone so close to the center of power speak so much truth. Perhaps, in the winter of his years, with nothing to lose other than a blemished reputation, he is turning towards truth.
But I'm more cynical. First of all, he plays up the Keynesian "animal spirits" nonsense by saying "What I think the S&P thing did was to hit a nerve that there's something basically bad going on, and it's hit the self-esteem of the United States, the psyche," then Greenspan adds that the crisis is "about the euro zone, not the US."
It seems to me Greenspan is laying the groundwork for what I've been saying will happen for a long time, which is what basically every other failing regime throughout history has done. The US federal government is simply going to print all the money it needs to pay off its debts. Wiemar Republic style! (Oh, and go to war.)
Greenspan Comes Clean and Endorses the 'Zimbabwe-Weimar Solution'
Hey, those idiots at S&P don't know anything about money and U.S. debt! Says who? The Great Alan Greenspan, that's who! Default? Fuhgeddaboutit!
Granted, because I am in the Austrian camp, I don't know anything about economics and money, but I still think my question should be asked: Is not the very act of paying a debt using newly-printed money in itself an act of default? Or, maybe I should be asking a more pertinent question: What has Greenspan been smoking?
For more on inflation:
- What is Inflation?
- Defining Inflation
- Inflation and the Fall of the Roman Empire
- John Williams: Hyper Inflation
- Confiscation Through Inflation
Greenspan: US Can Pay Any Debt It Has Because We Can Always Print Money is a post from: The Classic Liberal Blog