Parties’ ‘Failure’
Former Starbucks Corp. CEO Howard Schultz, who is considering running for president in 2020 as an independent, last month said the debt overhang is an example of both major parties’ “ reckless failure” regarding their constitutional responsibility.
Greenspan’s view is that unfunded entitlement spending will crowd out private-sector investment and curtail growth. Current Fed Chairman Jerome Powell sounded a similar note last month, saying “the U.S. federal government budget is on an unsustainable path,” given rising health-care costs and an aging population.
“Entitlements crowd out gross domestic savings, and domestic savings coupled with savings borrowed from abroad is the fundamental source of funding for capital investment,” Greenspan said. “And capital investment is the basis for productivity growth.”
This article provided by Bloomberg News.