Ever since the economy began to boom under the presidency of Donald Trump, a number of economists have been predicting economic gloom and doom. Many of them are anti-Trump liberals who have tried to use their gloom and doom economic predictions to scare people away from Trump. Others are used to the old saying that every good thing must end and when it comes to the economy, every time in US history, the economy has been great as it is now, it has always been followed by an economic decline. Fortunately, so far, the US economy has not been like some of the European countries who have been declaring bankruptcy and worse, as every time our economy has tanked, it has always rebounded, it’s just that every time it rebounds, it eventually tanks again.
Looking at the cyclic patterns of the American economy, it reminds me of the spring weather here in northern Kentucky. It can be cold with frost one day, a couple days later it warms up into the 70s only to see a couple inches of snow a few days later, followed by more warm days. Three days ago, my weather station in the back yard hit 84 degrees and tonight I have to take plants in because it’s dropping close to freezing tomorrow morning. This is what the history of the American economy is like.
The latest economist to predict the end of Trump’s booming economy is doing so not for the reasons many others have been, but for a very real and sad reason.
Alan Greenspan was THE most powerful man in America from August 1987 to January 2006. Why do I say that Greenspan was THE most powerful man in America during that time? Because he served as Chair of the Federal Reserve. Ultimately, Greenspan had control of the American economy more than the President or Congress as he set the base interest rates charged to the prime borrowers which in turn established the interest rates charged by banks, credit card companies and everyone else.
Greenspan served as Chair of the Federal Reserve under Presidents Ronald Reagan, George H.W. Bush, Bill Clinton and George W. Bush. Before that, Greenspan served as Chair of the Council of Economic Advisers under President Gerald Ford.
Greenspan was probably the best and smartest Chair of the Federal Reserve. During that time, he developed an extremely good understanding of the American economy, which is why I tend to take his economic prediction more serious than most of the others.
During an interview with CNBC, Greenspan stated:
“I think the real problem is over the long run, we’ve got this significant continued drain coming from entitlements, which are basically draining capital investment dollar for dollar.”
“Without any major change in entitlements, entitlements are going to rise. Why? Because the population is aging. There’s no way to reverse that, and the politics of it are awful, as you well know.”
In other words, the more the American people believe they are entitled to government handouts and benefits, whether they really deserve them or not, those entitlements are what will cause our current economic boom to go bust.
The opinions expressed by columnists are their own and do not necessarily represent the views of Barb Wire.