February 27, 2010

H.R. Clinton: The Massive Debt is Bush's Greenspan's Fault (But is She Also Sandbagging Obama?)

Monique Chartier


"It breaks my heart that 10 years ago we had a balanced budget, that we were on the way of paying down the debt of the United States of America," [Secretary of State Hillary Rodham] Clinton said.

"I served on the budget committee in the Senate, and I remember as vividly as if it were yesterday when we had a hearing in which Alan Greenspan came and justified increasing spending and cutting taxes, saying that we didn't really need to pay down the debt -- outrageous in my view," she said.

Setting aside the considerable irony of the context in which she made these remarks

Clinton, appearing before a congressional panel to defend the State Department's $52.8 billion budget request for the 2011 fiscal year

what's your first reaction to this blame-casting? In addition to questioning its accuracy (for example, did Greenspan really say we don't need to pay down the debt?), mine was, what about the trillions in new spending by the Obama administration and Congress?! As a friend said today, did Alan Greenspan roll into Congress with an army and MAKE them undertake all of that spending?

She couldn't really think that everyone has developed amnesia about all of the check writing that's gone on in DC for the last two years, could she? So isn't she kind of making President Obama, who not only signed into law but requested most of those large expenditures, look bad?

Alternately, with regard to the massive overdrawing of the national checking account, could she, on behalf of Congress and the administration in which she plays a key role, be adopting Geraldine's philosophy?

In any case, only two short years ago - and long after Alan Greenspan supposedly sang his siren song about the beauty of massive deficit spending - then Senator Clinton had quite a different opinion of Alan Greenspan, proposing that he guide Washington's response to the upcoming avalanche of foreclosures.

Former Federal Reserve Chairman Alan Greenspan and other economic experts should determine whether the U.S. government needs to buy up homes to stem the country's housing crisis, Democratic presidential candidate Hillary Clinton will propose on Monday.

Clinton threw her weight behind legislation proposed by Democrats Rep. Barney Frank of Massachusetts and Senator Chris Dodd of Connecticut that would "expand the government's capacity to stand behind mortgages that are reworked on affordable terms."

But she said a bipartisan group should determine whether that approach was sufficient or whether the U.S. government should step in as a temporary purchaser.

The working group could be led by bipartisan economic heavyweights such as Republican Greenspan, Democratic former Fed Chairman Paul Volcker and Robert Rubin, the treasury secretary under President Bill Clinton.

Ah, but what's needed now is not expertise but a blame pinata.

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If anything, Greenspan's holding down interest rates helped minimize the deficit as it kept down interest payments on Treasury securities. No, Hillary, the deficit spending can be entirely traced to "entitlement" growth and other spending by Congress.

Posted by: BobN at February 28, 2010 9:55 AM
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