"It is the worst economic and political environment that I've ever been remotely related to," Greenspan, 90, told a conference in Washington Tuesday evening sponsored by Stanford University and the University of Chicago.
On the economic front, the U.S. is headed toward stagflation -- a combination of weak demand and elevated inflation, according to Greenspan. "Politically, I haven't a clue how this comes out."
"We're not in a stable equilibrium," he said. "I hope we can all find a way out because this is too great a country to be undermined, by how should I say it, crazies."
Greenspan, who served from 1974-1977 in the Republican presidential administration of the late Gerald Ford, declined to comment on Wednesday when asked whom he was referring to.
Comment: Might we say the "crazies" are psychopaths?
Presidential Campaign
Democratic presidential candidate Hillary Clinton is leading Republican Donald Trump in opinion polls, though her edge over the billionaire has narrowed. In winning his party's nod, Trump ran a populist campaign, pledging to build a wall to keep out illegal immigrants coming from Mexico and threatening to slap tariffs on imports from China.
In his comments on Tuesday, Greenspan traced the rise of populism in the U.S. all the way back to 1896, when William Jennings Bryan gave his "Cross of Gold" speech at the Democratic Party national convention opposing the gold standard.
Greenspan repeated his concern on Tuesday that increased government spending on social security and healthcare are crowding out private investment and leading to slower economic growth. He bemoaned the fact that neither presidential candidate was talking about reining in those expenditures.
"Nobody wants to discuss it" for fear of a political backlash, he said.
In the past, Republican administrations on average countenanced bigger expansions in these entitlement outlays than Democrats, Greenspan said. In that regard, former Democratic President Bill Clinton -- Hillary's husband -- "turned out to be the best Republican," he said.
Reader Comments
horse hockey. We can't afford to spend on the people...the military and corporations, oh, hell yes...the people, no. His calling the nuts running things crazies? Pot, meet kettle. Yes, people...up is down and down is up.
As you know Alan, the Social Security system of the USA has been fully funded by the peoples taxes, and has been cash flow positive for quite a long time. You are also aware that the General Fund of the USA took all that surplus cash away from the Social Security Trust Fund, and left behind special IOU's. So, it is especially disingenuous to now say that Social Security has anything to do with the current economic slowdown in America. Look instead for your answer to 100 million people without work, the de-industrialization of a nation. And by the way, if the 100 million people were all working and therefore paying into the Social Security system, its quite likely the Trust Fund would still be cash flow positive - funding the General Fund still.
Like all economists, he believes economy is all. It has to be the way the world works. Lacks the imagination to understand there might be a better way. A specialist that has over-specialized, can't see the forest because he is far, far to close to his own tree-hugging.
Economy is not all. I claim quite the opposite, it will kill us all. And not just our civilization.
All governments and economicists howl that economies must expand. There is no other choice. Making some stuff called money whizz around quicker and quicker, because... just because. Apparently, that is what is defined as 'progress'.
Economies expand by having more and more people, it's called consumerism. This is why you have immigration. Example: Ben Bernanski, in his last speech to Congress as the head of the US Federal Reserve, claimed that that because the US population increased by 1.5%, therefore the US economy would expand by 1.25% (which I regard as an major over-estimation).
But that simply cannot work. You cannot keep expanding an economy ad infinitum by expanding the human population ad infinitum.
We live in a finite world, and this is our only one.
Most of the world's problems aren't. They aren't problems, they are symptoms. Too many people, all wanting too much, being greedy and selfish, only thinking of themselves.
So much for Homo Sapiens (wise people). We have failed to be wise in so many different ways.