Alan Greenspan issued a dire warning about the U.S. economy during an interview with Fox News on Thursday. Greenspan said that as Venezuela descends into martial law, the U.S. is heading in the same direction.
Since 1975, the sum of gross domestic savings and entitlements as a percentage of GDP has been remarkably flat and what that tells us is all the way back to ’65 we have essentially been seeing a one Dollar to one Dollar tradeoff between entitlement growth and gross savings decline. And despite the fact that we are borrowing savings from abroad its’ kept our rate of capital investment as a percent of GDP going down,” he said.
Greenspan who is “not exactly” a fan of Donald Trump or Hillary Clinton also discussed their opposition to trade deals and why they are critical to economic growth.
“People don’t realize, they think that you’re going to shut off, for example, imports from China, that somehow will create jobs in the United States — it doesn’t. Instead of getting goods out of China you will get them out of the Philippines or someplace else. But before they come back to the United States, they will try other places around the world where labor costs are perceived to be cheaper. So the issue of foreign trade is something which has helped the country grow all the way back to 1790 and the presumption that of sudden we’re turning off on trade is very narrow-minded in my impression,” he said.
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