PKT message, Alan Greenspan: Worried. Asking to be fired?

I'm with Curtiss Priest?the answer is yes. But the question is who's to be fired Alan or his president?

OK?another question remains: Which catastrophe is coming? The de-industrialization of America? The impoverishment of the middle class? The re-capture of the presidency by a candidate from the Democratic party? The protection of the system from potentially too high debt, due too soon as well?? (this last is not a catastrophe but the opposite.)

Greenspan and Curtiss are together on this?it appears: they both see the potential problem; neither see the necessary solution.

With any luck, Alan has just elected Kerry. Kerry will have to do what Roosevelt did?inflate our way to wealth (and to supporting home financing the way we supported the Savings and Loans many decades later). This translates into Kerry's jobs, health, infrastructure, environment, trade, and education programs?and major deficits with minor higher taxes for the very rich.

Yes we have worries: Existing nukes, future WMD's, and political more than financial instability almost everywhere.

Not that the inflation cure proves there is no financial instability?it proves only that such instability is easily cured by inflation.

Political instability is usually cured by war?and that cure is becoming next to impossible as science makes murderers of us all.

The challenge to internet forums is grave and great: we must work together to bring sanity to the defense of less than tyrannical governance. We must help Islam follow a path to democracy without the cost in blood and pain that Japan and Germany exacted. We must stop the hysteria over America being the problem?the tyranny of circumstance may be the problem: democracy (no worse than ours) is the solution

The inflation cure will come with little or no help from us.

John Gelles

Commentary by Dr. W. Curtiss Priest

(for the Center for Information, Technology & Society
to several economics and internet forums)

Yesterday Greenspan worried about the fact that 75% of all home mortgages are backed by Fannie Mae or Freddie Mac.

Today, we hear Greenspan asking for a decrease in Social Security benefits.

Are we on a road to catastrophe? This author firmly believes that the answer is yes.

With mounting household debt, how can this U.S. Government back huge liabilities involving household mortgages?

With mounting debts, reaching $44 trillion in one recent account, it is no wonder that Greenspan espouses reducing social security payments.

With 2/3rds of couples having no children (Boston Globe Magazine, 2/22/2004), we have an extremely precarious situation. When social security was conceived in the '30s, there was no provision for either a U.S. Federal government so sorely in debt, and no provision for a reduced workforce due to demographic changes.

All of this does appear to me as a matter of rearranging deckchairs on the Titanic.

We are incurring foreign debt at $1.5 billion a day, we have lost most of our manufacturing industry to other countries, we precariously hold onto computer software (as it is easily copied), and we precariously hold onto film and audio productions, too.

CPB's NOW program describes in detail how factory jobs in textiles are disappearing due to foreign competition.

I need to ask. What do we have left? Yes, we have a "grain belt" which produces food. No, we don't have much oil.

The current administration turned a blind eye to all issues of vehicular fuel economy and safety and emissions. This occurred because the regulations for passenger cars did not apply to trucks/recreational vehicles.

This was a huge hole in the barn's gate.

Are we out of the woods? Oh-my. With a record level of household indebtedness, and with a level of debt service that exceeds any recent numbers, it will only take a percent or two rise in the FED rate, to scuttle households on the brink of bankruptcy.

Can the FED continue to hold interest rates at historic lows? Should the FED continue to hold interest rates at historic lows?

In summary, this is an attempt by the current administration and the "federal bank" to prevent a disaster that is sorely waiting to happen.

Yes, you can create the illusion of increased corporate profits in this narrow period, but, can you remedy all of the debt-financed consumption that has occurred via banks that have let their lending standards go to practically nothing regarding risk, and a government that backs much of the risk -- home equity loans -- 2/3rds of which are backed by federal agencies.

This is an extremely unstable state of affairs.

Sincerely,

W. Curtiss Priest
CITS Debt Watch

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