The Austere Mr. Greenspan


“As a nation we may have already made promises to coming generations of retirees that we will be unable to fulfill.”

Alan Greenspan

“Greenspan urged Congress to cut the growth of Social Security and Medicare, warning that without immediate measures, the U.S. will face unsustainable deficits, rising long-term interest rates and slower growth in living standards.” (Reuters)

No one has taken on the task of bankrupting the US Treasury with greater zeal than Alan Greenspan. The wizened Fed-master has taken burgeoning budget surpluses and turned them into massive debt in less than four years.

Some readers will question whether or not Greenspan can be held responsible for the actions of the administration? But, it is the Fed’s monetary policy that enabled the Bush tax cuts to go forward and dump the country in a vat of red ink. Those tax cuts received the warm embrace of Alan Greenspan.

The Federal Reserve works hand-in-hand with the Washington policy-czars, keeping interest rates low when there are wars to be fought and ratcheting them up “sky-high” when anyone breathes a word about national health insurance.

Greenspan’s collusive relationship with the Bush Administration has left the country teetering on brink of insolvency. This provides the perfect opportunity to take the carving knife to the many social programs that Americans have come to depend on.

“If we have promised more than our economy has the ability to deliver to retirees without unduly diminishing real income gains of workers, as I fear we may have, we must recalibrate our public programs so that pending retirees have time to adjust through other channels,” Greenspan beamed at a recent appearance in front of Congress.

Here, the Fed-chief is attacking Social Security, the bane of conservatives who despise the notion that government should be involved in a national retirement program. Actually, it is nothing more than a safety net, sheltering the elderly from a future of abject destitution. Republicans traditionally prefer the Darwinian model that allows some to prosper through private investment while others look for a soft spot under a highway off-ramp.

Greenspan is simply carrying out the conservative mandate of “starving the beast”; the Reagan era mantra that exhorts leaders to dismantle government by generating enormous debt. This forces the government to cut back on heinous “socialistic” programs (re: Medicare, Medicaid, Social Security and other Marxist spawns) and conveys government assets to the anxious hands of private industry. In fulfilling his role, Greenspan has emerged as the Patron Saint of corporate profits; the “High Priest” of personal accumulation. He has used his position to successfully navigate the nation’s wealth into the hip-pockets of the American aristocracy while appearing to be evenhanded and even, “grandfatherly”.

Greenspan hasn’t criticized exorbitant Bush Tax cuts which have savaged the treasury and sent deficits through the floor. Nor has he railed against an inflated military budget that sucks up more than half of every tax dollar contributed. He knows that those expenditures serve the greater interests America’s oligarchy; enriching the few and seizing resources in the third world.

No, he would rather take aim at those struggling programs that offer some modicum of support for needy citizens. Social “safety nets” are anathema to the “dog-eat-dog” world of conservatives; those resources would be better spent on subsidies, corporate welfare, high tech weaponry or, the biggest “black hole of all, the war on terror.

Ultimately, the gravity of Greenspan’s actions far surpasses the issues of wealth distribution, or whether America’s elderly will spend their waning years in dilapidated hovels without water or heat. His maneuverings are a threat to the basic principles of representative government. He knows as well as anyone that democracy can be effectively undermined by eviscerating economic solvency. “Massive debt” transfers power to unelected authorities and creates a slavish relationship between the citizen and state creditors. (Those creditors, in turn, seize anything of value and sell it back to the citizen at twice the price.)

This is the real danger of Greenspan; he is putting democracy in a “hammerlock” and delivering the nation into the foul grip of the banking establishment and their brother-in-arms’, corporate America.

As the debt increases, our prospects grow dimmer.

Mike Whitney lives in Washington state. He can be reached at:



MIKE WHITNEY lives in Washington state. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press). Hopeless is also available in a Kindle edition. He can be reached at