to keep the economy going greenspan lowered the rates to the economy.i would have liked to have seen is the dollar fall because our goods became competitive internationally. the dollar is overvalued. we had a subsidy of 30% and all the imports and we put a tariff. what is going to happen if subsidize the importance, we had a trade deficit. rather than deal with the overvalued currency, we lost millions of manufacturing jobs and setting up the situation where we're losing the scheme of things. we are sustaining the economy with this bubble that was going to burst which is why i get mad at people like alan greenspan and most economists. it keeps growing. who could have known, they all say who could have known, anyone doing their job should have known. >> anything you want to address? >> war and domestic policy, government can't think about choosing thing they can't walk and chew gum at the same time. whether they believe it is something they invest in, the government doesn't think about what is going on at home. if you called on various leaders, in this p

this is michael greenspan reporting for "worldfocus" in israel. >> since michael greenspan filed that report in february of 2009, better place has announced that it intends to build a similar network of charging stations in denmark and australia. in israel, it is expected that 45,000 electric cars will be on the road by 2015. >>> and that is "worldfocus" for this wednesday evening. a reminder, you can watch us any time on the web at wor worldfocus.org. thank you for joining us. we hope to see you back here tomorrow night at the same time. -- captions by vitac -- www.vitac.com >>> major support for "worldfocus" has been provided by -- rosalind p. walter and the peter g. peterson foundation, dedicated to promoting fiscal responsibility and addressing key economic challenges facing america's future. and additional funding is provided by the following supporters --

people like alan greenspan and ben bernanke gave us the largest downturn since the great depression. that is why we have a huge budget deficit. we didn't have a huge tax cuts. we had stimulus and response to the downturn. we have higher unemployment if we have not had that but let's be clear if we are upset about the deficit greenspan and bernanke, i don't know why we reappointed bernanke. in terms of the entitlement programs, yeah we have a public pension program, which is hugely popular. you look at polling day that-- i was at a conference this morning in social security is over 90%. they ask people would you be willing to pay higher taxes to sustain sosa security benefits and 70 to 80% said yes. i don't see any problem with running a pension program through the public sector. what is the problem with the? it is usually popular. health care costs, medicare again. we are providing medicare health care benefits for seniors. that is also hugely popular. you have these tea party people out there yelling don't let the government touch medicare. they are anti-government but they want med

the fact that the fed, he and his predecessor, alan greenspan, were largely responsible for the mismanagementthe economy, failing to have regulations that would have stopped us from getting into this mess, even as we have been pulled back from the brink. unemployment has soared. people have said we will not be back to normal unemployment until the middle of the decade. yes, it is great the banks are paying bonuses again, it is great they are making big profits. america is still in not good shape. tavis: how do you respond to the notion that i have read that the obama team, speaking of bernanke, that the obama economic team, tim geithner, larry summer, that group, there is not a stiglitz-like voice in that group? you hear the critique all the time of what is missing on the economic team. what are your thoughts? >> i think one of the strengths of clinton's economic team is it ranged all the way from the right, secretary of labor, to rubin, secretary of the treasury, left to right, with people in the center. i think that is valuable. we had a very fierce debate. on corporate welfare, how much mo

and they approached managing monetary system... >> rose: are we talking about summers, rubin and greenspanr we talking about whom? >> well, that group but there were others. one of the things i think is important in that this area is not just to focus on individuals but to focus on ideas and these ideas were very pervasive. one of my concerns has been not only did they bring some n some sense the wrong mind-set but because they were so closely affiliated with the mistakes of the past, it would be very difficult to get confidence. >> rose: with great respect for a nobel laureate, some might argue that joe stiglitz is a little bit outside and he's screaming a bit because those guys were brought inside and he wasn't. and he had a nobel prize, experience at the world bank, and had written a number of books and was, you know, a distinguished professor. so therefore he had all the credentials to be the inside and he wasn't and they were. so now he's saying those guys had a mind-set that prevented them from fixing the problem. >> well, i really didn't want to go inside. i had been through that ex

he kept alan greenspan on. as these two things were happening, the dot com bubble was deflating and housing bubble was being created to fill the hole. along came the september 11 attack on the united states of america. the attack on what may have been this capitol building or the white house. i think it would have been the capitol building, the attack on the pentagon where we lost our braved servicemen and women there and the attack on the trade tours by the price that was paid by innocent civilians. that happened on president bush's watch. i don't know that one could point to any act of omission or comission. that happened. they found a vulnerability that always existed and al qaeda exploited it. so we ended up at war. the gentleman from wisconsin said we were involved in two wars. we drove al qaeda out of afghanistan. and with a minimal number of troops in u.s. uniform, liberated the country of afghanistan and eradicated afghanistan of al qaeda terrorists, who need some kind of habitat if they're going to ope

greenspan to the senate to say, defeat the payne-bachus legislation because it would disrupt the stock market. you may recall. so i commend you again for the great work that you've done. as we've mentioned, haiti has such a tremendous history and i might just, since we know what's in the bill, also mention that it was during the revolutionary war that haitian soldiers fought in one of the key battles, the battle of savannah, where just recently a statue was completed in savannah, and i spoke at the dedication a year or so ago. it turned the tide of the war and haitian soldiers fought in a number of battles to help the original colonies of the united states become independent from britain. so they shed blood for our independence, many people not knowing that, and then as you know the defeat of napoleon's army by haiti as was talked about, the reparations that had to be paid back caused france to be cash poor and land rich and therefore forced them to settle -- sell the louisiana territory to the united states because it had lost the cash that haiti produced, over 50% of all the commodit

alan greenspan was in charge and garry corrigan was at the new york fed. 20, jerry corrigan got on the phone and told the new york clearing banks to keep their credit lines to the broker- dealers open. he did not want to force a massive sell-off in the stock market because the banks are withdrawing credit from these particular actors. that was not a matter of risking large firms. it was a matter of rescuing the financial system. we had many, many failures at that time of investment banking firms in the 1970's and into the 1980's. there are sometimes systemic crises where it is the task of the authorities to step in with public money and public commitment to stop the crisis before it spins out of control parts of it seems to me that on discussion of too big to fail, there is a loss of this notion that when the crisis become systemic, that is when we need to have public money potentially at risk and we should not lose sight of that. this done, big institutions were involved in the development of the crisis. that has not always been the case. in the savings-and-loan debacle, we had hundre

greenspan greenspan, in my opinion, has never been more right. even this extraordinary step of splitting this institution apart is not sufficient. cleaving investment banking from traditional commercial banks will still leave us massive investment banks, some with balance sheets that exceed a trillion dollars in assets. for that reason, glass-steagall would need to be supplemented with strict size and leverage constraints. to ensure that regulatory forbearance does not permit another lehman brothers, we should institute a simple statutory leverage requirement. for instance, a limit on how much funds can borrow relative to how much the chair holders have on the line. i would also stress, however, that a leveraged limit alone with now breaking up the biggest bank will not have the effect we need. too big to fail banks enjoy a major funding advantage and leverage limits by themselves do not address that. our biggest banks have become significantly smaller if we are to make any progress at all. turning to derivative reform, i applaud the efforts to p

greenspan and i think mr. bush didn't realize was that once you start taking on more debt, it gets harder and harder to stop. and we started a trend of taking on more debt as if it didn't matter. some people even said deficits don't matter. some republicans said deficits don't matter. we can handle it. well, we got in a bad habit and we both -- and both parties got into that habit, and it is roaring away today at spending levels, the likes of which we have never seen. we have passed a budget that i think has reality in it. i think if we hold to that budget, we might surprise ourselves how much progress we can make, and these kind of statutory caps were part of the success in the 199 1990's. so i -- in the 199 1990's. so -- in the 19090's. so i would ask forgiveness of my colleagues for pursuing a vote on this, because if we get the 60 votes, i would say to my colleagues, that would be an indication it would not in any way burden the f.a.a. bill. in fact, it might be attractive to some members of this senate to

unlike greenspan, he is seeking dialogue about the currency occasion. he has gone as far as testifying in congress that going off the gold standard doctoring the during the great depression by debasing the currency, he helped spur growth. so he likes to have currency to spur growth. and also referencing the banana republic, i agree, greece may be a banana republic, but greece as a whole only is running half as much of a deficit of their gdp as in the u.s. so while in greece they certainly have made their issues, at least they're trying to contain the spending, and while it looks like a circus over there, when push comes to shove, the europeans are spending less money, they're printing less money, and as a result, we do believe that the euro will be much stronger down the road. >> all right. so axle, let me just -- this is a good contrary view. you're a buyer. dave goldman would be a euro seller. what happens if the euro does go up and the dollar goes down, axle? just take a gander. what does that mean for the u.s. stock markets? >> well, it's not necess

. >> we're joined now by cnbc's jim cramer and former chairman of the federal reserve alan greenspan.ery day i say i can't believe i've got my own show. ♪ but don't forget, folks ♪ that's what you get, folks ♪ for making whoopee >>> the chairman says the energy rush is on. after all the oil and gas deals we've seen, exxon buying xto, total buying a quarter of chesapeake's barnett shale assets, mitzi going in for a stake in anadarko's marcellus shale acreage, how about bp buying devon's best overseas properties for 7 billion last week, that stock's getting cheap, and console energy, a coal company for heaven's sake, buying dominion resources' marcellus shale assets, we've got to believe there are more takeovers coming. so tonight as your investing coach i am going to help you speculate wisely. a double-barrelled speculation friday. on a company that's got so much gas that i am literally coming out here with a basket of whoopee cushions sent to me by my pro-coal, obviously pro-fat flatulence sister to spice up still one more oil and gas story. better. i know the price of natural gas has

>> didn't chairman greenspan famously say that history has not treated low risk spreads very well?s turned out to be a very prescient saying. >> but it happened again, didn't it? >> it did. >> and it almost took it down all the way. >> i thought he said it in the 2004-2005 period. so we were looking at the low spreads. but maybe not emphasis on that. >> you've got some really important decisions to make with regard to the quantitative easing and how we begin to get back to a more normal situation. what will you look at, jim? what are the data you will look at to determine whether this recovery has become self-sustaining and we've achieved the escape velocity that will give you the confidence to begin getting back to a more normal situation? >> i think we're on track. i think we're recovering. we'll continue to have positive gdp vote in the first half and throughout the year. >> do you look at job creation and confidence? >> it's been frustratingly slow, i know. but list be here, i think we'll get some good months of jobs reports coming up very, very soon. we're looking for march to

but some people who know the fed very well including alan greenspan, the former chair of the board of governors, including the members of this advisory council, including several other former members have said publicly we don't think the fed is structurally suited to do this. the fed is most familiarly in charge of managing economic growth, it has a considerable responsibility to regulate the health of the financial system. consumer protection is as long finished at best third on that list of priorities. that's not going to change. and that responsibility should be moved elsewhere. host: to hear the consumer advisory arguing for a free-standing agency. guest: it is striking that these people who have long been part of the process who are in some respect on the inside of that institution are basically saying, you know what? we know this place and we don't >> tomorrow, our roundtable with reporters on the week ahead in congress. joseph henchman discusses the recent trend in states to raise sales taxes to fill budget gaps. and a discussion of the study showing that

greenspan, and within a few hours come up with a solution on social security.at's not coming any time soon. so if you take that off, then you look at, well, what's left in the budget? well, close to 20% in the high teens is defense, wars in iraq and afghanistan, v.a. hospitals, and even this administration, which is castigated for being too far to the left has advocated increased spending in this area by 1.5%. i don't see any big cuts coming there. and then the rest of theg#t@@@u) totally radio active, toxic to any politician who would be talking about a tax hike any time soon. so you can forget all the trial balloons about a fat tax. every couple of years you can set your watch on a bunch of leaks that we're going to go for a tax. it's not going to happen. nobody would go after something that could be demagogued that easily. that would be a huge source of revenues. but that's not, i think, in the cards. another area that i would have said a year ago was ripe for revenues would be to go after u.s. and multi-nationals. there was a big push, and it's still in the

him of a cartoon i saw when i was on the federal reserve board in that cartoon showed a chairman greenspan at that time in office and he said of his desk and there is an aide standing beside him. out the window you see all these people, jumping out of windows when plummeting down. and the aide said his and tights, mr. chairman. [laughter] so they do have so careful what they say and rear guard of honor that today. we're not where to put them in a position where they have to be concerned about some statements they make. been taken at of this room in a way that with indicates where signal something about monetary policy so we will honor that. this is in respect of what is a group of led presidents, we've taken a very strong position in the current legislative and fermenta along with five other trade groups beat wrote to a letter to senator dodd and shall be emphasizing the 12 regional banks are a source of strength and our economy and how important and independence federal reserve system really is. and i appreciate the fact that -- we know how important their role is the place in the crisis.

in the now immortal words of alan greenspan -- quote -- "those of us who have looked to the self-interest of lending institutions to protect shareholders' equity, myself especially, are in a state of shock, disbelief." the time has come to get over the shock and get on with the work. what about the professionals, accountants and lawyers who are supposed to assure that their clients obey the law? indeed, they often claim that simply being -- by giving good advice to their clients, they're responsible for far more compliance with the law than our government investigators. that claim rings hollow, however, when these professionals now seem too often focused on helping their clients get around the law. expert like professor peter henning of wayne state university law school, looking at the report on the repo 105 transactions, are stunned that the accountant, ernst and young never seemed to be troubled in the least about it. of course, the fact that lehman executive was blowing a whistle on the practice in may 2008 did not change anything. attorney cause some discomfort in the ranks. while say

he was accompanied with tom greenspan. obviously, we chose to ask him the questions that we did.t at all that he's answered all the questions, robin, there's still many more that many more people want to ask him. >> you can tell us why now, he decided to answer some questions now? >> i really couldn't speculate why he and his camp made that decision and made this opportunity available. but you could suggest it, after having made the public statement, robin. and then making public the decision to go to augusta to play the masters, to try to defuse some of the question this is he may face when he arrives there, so he may be able to focus a bit more on the competition itself. >> being at the masters, period is challenging without all of this. all right. howard, we're going to let you weigh in now. you have all along said that tiger needs a game-changer. is this it? >> it's not, unfortunately. it was a nod in the right direction, but merely a nod. too little too late. when tiger made himself vulnerable when he really looked at himself, acknowledged his mistakes and what he did to his

eight years before that we had alan greenspan in the air and we had a discussion about the fact that trillion surplus could take the country to be debt-free at the conclusion of the bush administration. a bunch of decisions were made so rather than surpluses to up $5 trillion national debt in an intellectual discussion about the economics of profiling a nation that was debt free we had double the debt and as was the case at the end of world war ii in part for national defence no one should suggest we should have forfeited world war ii rather than run up some debt or concede to a osama bin laden and co. and sacrifice the lives of americans because we are afraid to spend money. in part we spend on national security and we give tax cuts andç so on. the point i want to get to is there has been a lot of discussion with the ranking member about the deficit. the deficit is -- i am not talking about the national debt. we have seen the president set up the debt commission with senator simpson's. we have seen the vice-president say that this national debt is a national security issue. the sec

you have your alan greenspan who was a rock star -- come on, give it a break. i have no questions because i already have all the answers. guest: i think the caller speaks about the accountability of the federal reserve system. there are a lot of very smart people. people would argue with the caller would say that these are complex issues and you do need expertise. the problem with the federal reserve situation is its structure, particularly the new york federal reserve. it hands out a lot of bailout money but is not accountable as a member of the house is that you can vote about every two years. the feedback from the public when it disapproves the exercise is very limited. the congress should be discussing the structure of the governance of the federal reserve system now. is a burning issue. when you look at the gallup polls, the cross section of government agencies, center for disease control, fbi, and everything else -- the fed is less popular than the irs. it has fallen 23 points in the last five years in their approval rating. it is obvious that the populat

something that congress did, even though it was $2 billion, a created moral hazard because even greenspan there was a $14 billion in direct subsidy to fannie mae and freddie mac, which also encouraged the distortion, and on the books, it was legal for the federal reserve to buy more -- mortgage debt. of course there note -- there were no restrictions because it was done in secret how much credit was created. because my concern and understanding of what was happening in july 2002, i was convinced that we were working on the financial bubble, and i introduced into days -- introduced legislation that would of remove the line of credit from the treasury as well as prohibited the fed from buying mortgage debt, which most people would object to. this was an emergency! but that is what caused the moral hazard. and that was for the benefit of the selling debt overseas, encouraging foreigners to buy it, knowing the treasuries stand behind it and the federal reserve stands behind it. when i introduced that legislation back in 2002, by transferring their risk of widespread mortgage default, but gove

greenspan says he was wrong to not set had more controls.ou need supervision over these controls -- over these programs. this is a part of our economy. many people do not have health insurance. people who do have insurance are finding that their premiums are going up, there copays are going incomup. it covers less and they have more of a battle to get it. many people i represent will go bankrupt this year from health- related deaths. many of them have insurance. that does not happen anyplace else in the world. look at the ratings of our life expectancy or how many children died before they reach the age of one. the united states hits the top of the list. it is not in the top 10. we are down in the 40th world rankings. for the privilege, we are paying more than anybody else in the world. it is about $1 trillion at sure that we pay every year more than the people we are competing with economically. we cannot go on that way. i supported a public plan. host: remember when obama was going to give us that option with a public plan? another lie. gu

alan greenspan was given by the congress in 1994 the ability to regulate mortgages in and out of theing system because more of the problems came outside the banking system than inside. he refused to do it for the ideological reasons. if he had used that authority, we would not be in the same problems we are today. in other cases, new forms came up -- derivatives, credit defaults swaps. çthe problem was not the regulation but non-regulation. when the economy evolves as it does, the new parts reach a point where new regulation is needed because there are new phenomenon. theodore roosevelt recognized that. franklin roosevelt recognized that. the people in power until recently did not understand the need for that. we are trying to put together regulations for the financial community that will do what theodore roosevelt and franklin roosevelt did -- not attack private business, but set up fair rules. you understand that. let us give an example -- the community reinvestment act. it is a right wing argument to blame the community reinvestment act for the fact that they would not regulate s

while alan greenspan and others said some smart people could get together in a room and within a fewrs come up with this solution on social security, that is not coming anytime soon. you look at what is left with the budget. close to 20%. defense, wars, va hospitals, even this administration which is castigated for being too far to the left has advocated increase in spending in this area by 2.5% in the upcoming fiscal year. i did not see any big cuts coming. the rest of the budget is just interest on the national debt which is about 14%, a high number. i do not see deep spending cuts being a fruitful area where we are going to whittle down this deficit of $1 trillion or more for the next couple of years. then we come to the most controversial option of all. that is what about a new source of revenue? i would be interested in our next speaker. i would have told you if of your one year ago that i thought maybe there will be new revenue. maybe there is a way to deal with a deficit that way. i think charlie would agree that after what happened to john courson and massachusetts, tax hikes

because we had projected the payoff of the national debt held by the public or co-infection 2001 greenspan was answering questions, what is going to happen when we pay off the national debt? what is going to happen to the bond market? those were questions he was answering in 2001. then you wreck the budget so all of that is actually your policy, not ours. we like to change the policy. we inherited a big deficit. we are in the middle of the recession. we have to do jobs first and then we will be the is fully responsible things in light of all the complaints we are going to get from the other side. we are going to get the budget back under control but we can't do it until we get the budget straight and health care is going to help because that is the biggest thing in terms of the problems with the budget. i yield. i am going to get to that. i will skip to that part. we call for the 72 hour posting for reconciliation prior to consideration on the house floor is redundant. the house leadership has already committed to have the text posted 72 hours before the house considers the bill. so it is

but some people who know the fed very well including alan greenspan, the former chair of the board of governors, including the members of this advisory council, including several other former members have said publicly we don't think the fed is structurally suited to do this. the fed is most familiarly in charge of managing economic growth, it has a considerable responsibility to regulate the health of the financial system. consumer protection is as long finished at best third on that list of priorities. that's not going to change. and that responsibility should be moved elsewhere. host: to hear the consumer advisory arguing for a free-standing agency. guest: it is striking that these people who have long been part of the process who are in some respect on the inside of that institution are basically saying, you know what? we know this place and we don't think this should be here. host: atlanta, georgia. you're next. roy on our democrat's line. caller: how are you? guest: fine, thank you. caller: well, let me say this. what he speaks of the fed, whatever, we have to stop giving these

alan greenspan himself said he was dismayed self-regulation didn't work. that financial collapse brought on by no regulation, reducing revenues, unemployment caused us to reduce spending, here we are on the floor debating about unemployment insurance, food stamps and other support requirements when in the previous administration, they didn't talk about these issues that cost $7.1 trillion over the next decade. they weren't funded. there was no funding for medicare prescription drugs. there was no funding for the tax cuts. it's true, madam president, that the budget for next year will not be as close to balance as we all would wish, but i believe that is because of the hand we were dealt. the best way to bring the budget back into order over the long run is to grow our economy. grow our economy. this is something everybody in this building believes in. the way to bring it back is grow our kpheufplt our inheritance from the previous administration were tax cuts overwhelmingly tilted to those who are already well off. unfunded new entitlement programs and two

alan greenspan's not going to sleep at night, he said, because he worried that the surplus was going to pay down the federal debt too fast. he literally said that, i worry about paying down the federal debt too fast, so we need to be a little careful about accruing these surpluses. and so president bush said, what we need to do is have a very large tax cut. i stood here on this floor of the senate and said, do you know what? these surpluses exist this year only and the next ten years of projected surpluses don't yet exist, they are simply projections. let's be a bit conservative. what if something happens? and they said katie, bar the door, we're going to do this anyway. they did it. didn't support it. very large tax cuts, very substantial reductions in federal revenue. about 50% of the structural budget deficit at the moment is the result of reducing the revenue base ten years ago -- nine years ago. i said on the floor of the senate, you know, let's be a little conservative, what if something happens? well, guess what happened almost immediately? we passed tax cuts -- not with my vo

and fed chairman alan greenspan testified that we might pay off our debt just too quickly. we were told that we might have too much money. really, he did this, he testified to congress saying that was a real worry. then we paid for an unnecessary war in iraq without offsets, we passed medicare part-d without offsets, we passed three different sets of tax cuts totaling trillions of dollars, most benefiting the wealthiest people in the nation. without offsets. yet last thursday night, the senator repeatedly -- senate repeatedly attempted to extend benefits for america's unemployed workers and these efforts were blocked supposedly because it wasn't fully offset. now, for some reason, benefits to the wealthiest americans, they didn't need to be offset, but keeping unemployment benefits flowing to those families who have been hardest hit by this recession, now suddenly they, they need an offset. if this is a matter of princip principle, it seems to me to be a very, very bizarre principle. one principle we should all stand behind is supporting american families when economic time

now eight years before that, we had allan greenspan in here. we had the discussion that a $5 trillion surplus could take the country to be debt free at the conclusion of the bush administration. a bunch of decisions were made. rather than surpluses to erase a $5 trillion national debt and an intellectual discussion about the economics profiled the nation that was debt free, we had double the debt. and as it was the case at the end of world war ii, in part for national defense. i don't think anyone would suggest that we should have forfeited world war ii rather than run up some debt or should we concede to bin laden and company, you know, and sacrifice the lives of americans because we're afraid to spend money. so in part we spent on national security. and we also did tax cuts and so on. the point i want to get to now is there's been a lot of discussions and with the ranking member about the deficit. i want to talk about the debt. the deficit is just what the gap is year to year. we've seen the president set up the debt commission with erskine b

something that congress did, even though it was $2 billion, a created moral hazard because even greenspan$14 billion in direct subsidy to fannie mae and freddie mac, which also encouraged the distortion, and on the books, it was legal for the federal reserve to buy more -- mortgage debt. of course there note -- there were no restrictions because it was done in secret how much credit was created. because my concern and understanding of what was happening in july 2002, i was convinced that we were working on the financial bubble, and i introduced into days -- introduced legislation that would of remove the line of credit from the treasury as well as prohibited the fed from buying mortgage debt, which most people would object to. this was an emergency! but that is what caused the moral hazard. and that was for the benefit of the selling debt overseas, encouraging foreigners to buy it, knowing the treasuries stand behind it and the federal reserve stands behind it. when i introduced that legislation back in 2002, by transferring their risk of widespread mortgage default, but government encour

you remember greenspan talking about the conundrum of why the fed could not succeed in tightening u.s. monetary policy. the reason was we were having to attract all the foreign money to finance our external deficits. that foreign money kept the monetary conditions easy and that promoted the excessive borrowing, the excessive lending, the overleveraging, the underpricing risk of that was a major factor in bringing on the current crisis. so the bottom line is that as long as we run these big, foreign deficits, we're damned if the foreigners do finance us and we're going to be damned even worse if they don't finance us. we've got do get our house in order. the only way to do it is to get the budget deficit under control, to advance the competitiveness agenda that norm augustine was talked about, to promote open, international markets so we can sell abroad and expand our exports and improve the trade benefit in that way as carla hills just described and i think this report points us in all those directions. thank you. >> thank you. i'm going to ask the panelists now a few questions. and t

so we had the first six years of the bush administration, we had alan greenspan testifying in the first months of the bush administration that we had $5 trillion surplus and we could be an entirely debt-free country. at the conclusion of eight years of the bush administration, eight years later, much different reality, the republican party in its outrageous to hear this selective amnesia of some of my great friends nlt other side, the war and we have been at war before as a country but we have always paid for it with war bonds and taxes. we paid for it. and then finally, the -- a major increase in entitlements without paying for it. so the country is now fiscally brupt as you come into office. the president has a national office of over $10 trillion. a deficit in his first year by the time he was sworn in over a trillion dollars. t place the blame on this administration. it's an amazing political feat that they're trying to pull off. i don't think it's going to work at the end of the day. but i do want to get to the substance, what we have to to go forward because you've done a great jo

greenspan's seven the smartest people could get together and come up with a solution -- said the smartest people could get together and come up with a solution for social security. that is not going to happen. even this administration, which is castigated for being too far to the left, has advocated increased spending in the military by 2.5% in the upcoming fiscal year, so i do not see any big cuts coming there. the rest of it is just interest from the national debt, which is 14%, so i do not see the spending cuts being a fruitful area where we are going to whittle down this deficit of a trillion dollars or more over the next couple years, and then we come to the most controversial of some of all, and that is, what about a new source of revenues? i would have told you had had been here a year ago that maybe there would be some new revenues. maybe there would be a way to deal with the deficit. i think charlie would agree after what happened in massachusetts, there is no politician that would talk about a tax hike any time soon. you can forget that. every couple years you can set your watch

alan greenspan was by the congress in 94 the ability to regulate mortgagesn and out o the banking ste of the pblemsysidthehan inde. heefed to the for was toint that s e discrimination continues. i think iensitive on the subject of race. but i was reminded recently how living day-to-day is different than just looking at it. i was making a point i have made before. in the security minded world, one of the things you get our trunks sales. -- are trunk chekcs. has anybody who did the trunk checks at a security point been subjected to a search? everybody i mention that to said know until i talked to an african american man yesterday. he said he gets it all the time. race is still there. we were reminded by that done in massachusetts -- we were reminded by a survey done in massachusetts. non-white borrowers were much more likely to be given some prime loans than white borrowers with less income. that is something we have to deal with. you are obviously people who can help us fight that. i want to leave some time for questions. we are going to continue to promote responsible home ownership w

alan greenspan was given by the congress in 1994 the ability to regulate mortgages in and out of the banking system because more of the problems came outside the banking system than inside. he refused to do it for the ideological reasons. if he had used that authority, we would not be in the same problems we are today. in other cases, new forms came up -- derivatives, credit defaults swaps. the problem was not the regulation but non-regulation. when the economy evolves as it does, the new parts reach a point where new regulation is needed because there are new phenomenon. theodore roosevelt recognized that. franklin roosevelt recognized that. the people in power until recently did not understand the need for that. we are trying to put together regulations for the financial community that will do what theodore roosevelt and franklin roosevelt did -- not attack private business, but set up fair rules. you understand that. let us give an example -- the community reinvestment act. it is a right wing argument to blame the community reinvestment act for the fact that they would not regulat

something that congress did, even though it was $2 billion, a created moral hazard because even greenspanon in direct subsidy to fannie mae and freddie mac, which also encouraged the distortion, and on the books, it was legal for the federal reserve to buy more -- mortgage debt. of course there note -- there were no restrictions because it was done in secret how much credit was created. because my concern and understanding of what was happening in july 2002, i was convinced that we were working on the financial bubble, and i introduced into days -- introduced legislation that would of remove the line of credit from the treasury as well as prohibited the fed from buying mortgage debt, which most people would object to. this was an emergency! but that is what caused the moral hazard. and that was for the benefit of the selling debt overseas, encouraging foreigners to buy it, knowing the treasuries stand behind it and the federal reserve stands behind it. when i introduced that legislation back in 2002, by transferring their risk of widespread mortgage default, but government encouraged the

i think as greenspan said, who would have thought?my big question here is no is talking about a flipside on this. i'm hearing in san diego that there are people out there ready to buy and take these sales, take these loans over, take over the home, but because we are caught in the system that takes so long, there are massive amounts of market after that is not available for the free market to take over these debts. anybody got any answers there, any comment on that? we're not talking about, you know, there is the keep the person in the home can't figure out how to make them pay. you pointed out, the greatest threat is jobs. what do you do with somebody who is not going to have a job in the next year? do you continue to carry this, and is this the way to go? or do we also get the other option that the person with the job who doesn't have a home would like to buy, take over the payments, isn't being allowed to access the market because is basically been frozen by this process. you had a comment about the? >> i think what we really need

now eight years before that, we had allan greenspan in here. we had the discussion that a $5 trillion surplus could take the country to be debt free at the conclusion of the bush administration. a bunch of decisions were made. rather than surpluses to erase a $5 trillion national debt and an intellectual discussion about the economics profiled the nation that was debt free, we had double the debt. and as it was the case at the end of world war ii, in part for national defense. i don't think anyone would suggest that we should have forfeited world war ii rather than run up some debt or should we concede to bin laden and company, you know, and sacrifice the lives of americans because we're afraid to spend money. so in part we spent on national security. and we also did tax cuts and so on. the point i want to get to now is there's been a lot of discussions and with the ranking member about the deficit. i want to talk about the debt. the deficit is just what the gap is year to year. we've seen the president set up the debt commission with erskine b