Endless Curiosity

January 30, 2009

How lucky we are that we changed course

Filed under: Republicans — Alec @ 8:18 pm

On January 25, 2001, five days into the Bush Adminstration, Alan Greenspan testified in the Senate and had some great words to say about the wonderful financial state of the U.S. left by the Clinton Administration. We can thank God that the Bush Administration decided to change direction and follow the course laid out in Greenspan’s ending cautionary note. Think how terrible things would be if we had actually paid of the federal debt before the end of the decade.

But let me end on a cautionary note. With today’s euphoria surrounding the surpluses, it is not difficult to imagine the hard-earned fiscal restraint developed in recent years rapidly dissipating. We need to resist those policies that could readily resurrect the deficits of the past and the fiscal imbalances that followed in their wake.

Here are some of the things Greenspan said about how wonderful things were at the beginning of 2001.

… the experience of the past five to seven years has been truly without recent precedent. The doubling of the growth rate of output per hour has caused individuals’ real taxable income to grow nearly 2-1/2 times as fast as it did over the preceding ten years and resulted in the substantial surplus of receipts over outlays that we are now experiencing….

…if current policies remain in place, the total unified surplus will reach $800 billion in fiscal year 2011…

The most recent projections, granted their tentativeness, nonetheless make clear that the highly desirable goal of paying off the federal debt is in reach before the end of the decade….

The full testimony.

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