BY MICHAEL JOHNSON
“I’m scared.”
That was the response of the guest speaker at a luncheon the other day, after I told him his speech was a little scary. We were riding down the elevator together and by the time the doors opened to the lobby I was convinced he was serious.
The speaker was Dr. Alan Greenspan, the man who served as chairman of the Federal Reserve for 18 years and is as much admired as he is despised. Whatever you think of him and his tenure, his remarks were chilling.
Greenspan’s message was that the short-term economic outlook is pretty decent because the stock market is driving the recovery. The long-term outlook, however, is grim. That’s because eventually U.S. debt is going to consume so much capital that there will too little left for the private sector to borrow.
When the private sector cannot borrow it cannot produce and when it cannot produce, the economy fails.