Greenspan: Obama’s ‘Worst Mistake’ Was Rejecting Simpson-Bowles Deficit-Reduction Plan
Former Federal Reserve chairman Alan Greenspan says President Barack Obama blew it when he effectively rejected the Simpson-Bowles 2010 deficit-reduction proposal.
"The worst mistake the president made was not embracing that vehicle right away," Greenspan said at the Bloomberg Washington Summit, The Wall Street Journal reports.
The proposal, written by former Republican Senator Alan Simpson of Wyoming and former Clinton White House Chief of Staff Erskine Bowles, would use a combination of spending cuts and tax increases to reduce the growth of the deficit by roughly $4 trillion over 10 years
"It's the ideal vehicle, which won't get us fully out of this" fiscal situation, says. Greenspan adding that the Simpson-Bowles plan is ideal because it allows political compromise even if it wouldn't now completely resolve the deep fiscal problems the country faces.
According to Bloomberg, Greenspan also told the summit that U.S. stocks offer good value and are likely to rise as corporate earnings increase over time.
“Stocks are very cheap,” Greenspan says, citing “a very low price-earnings ratio.”
“There is no place for earnings to grow except into stock prices.”
Meanwhile, Senator Lamar Alexander says he’s ready to throw his weight behind President Obama’s debt reduction commission, which first made its recommendations more than year ago, Nashville Public Radio reports.
Another member of Tennessee’s congressional delegation tried the same thing and failed by a landslide, WPLN reported
The plan outlined by the Simpson-Bowles commission hit the floor of Congress with a thud in late 2010. The plan makes deep cuts to military and domestic spending and raises the retirement age. Now, a number of lawmakers in both parties are giving Simpson-Bowles a second look.
Alexander hopes he can muster 60 votes for his bill, even with a big election coming up in November. WPLN reported.