Tags: alan greenspan | economy | grow | gdp | trump | tax | cuts

Greenspan: Slowing Economy Won't Grow at 3 Percent Rate

By    |   Wednesday, 13 June 2018 01:23 PM

Former Federal Reserve chairman Alan Greenspan warned Wednesday the U.S. economy is already slowing down and won’t be growing at a sustained, annual three percent rate despite optimistic forecasts.

“The presumption that we are going up from here — I think is wishful thinking,” Greenspan told CNBC.

"What I don't think is going to be happening over time is GDP that stays close to the 3 percent, and the essential reason is that ... entitlements are crowding out gross domestic savings," he said.

To be sure, the Atlanta Federal Reserve’s GDPNow forecast model recently showed the U.S. economy is expanding at a 4.6 percent annualized rate in the second quarter in the wake of upwardly revised data on wholesale inventories for April,

The latest estimate on gross domestic product growth was a tad stronger than the 4.5 percent pace estimated on Wednesday, the Atlanta Fed said.

And just last week, White House economic adviser Larry Kudlow predicts that the U.S. economy, the fastest growing among industrialized nations, is on the path to even greater prosperity under President Donald Trump.

“The United States now has the fastest growing economy in the world, according to the OECD, or at least the fasting growing economy among the industrialized nations,” Kudlow told reporters at a White House press conference.

To be sure, the Organisation for Economic Cooperation and Development (OCED) reported in its biannual Economic Outlook that among the “major seven” economies, the U.S. recorded the highest annual growth (2.9%), while Japan recorded the slowest annual growth (1.0%).

Greenspan, however, said such predictions are essentially wishful thinking.

“Most forecasts that I’ve seen, which I find credible, show that while we are currently close to the 3% annual rate, we are not going to stay there,” he said.

Greenspan repeated that the economy is moving from stagnation into "stagflation," which is commonly defined as persistent high inflation combined with high unemployment and stagnant demand in a country's economy.

“I don’t see how we get out of it,” without entitlement reform and other difficult government-spending cutbacks, Greenspan said.

Greenspan touted the Trump tax cut and the president’s quest to eliminate business regulation as ery beneficial to the economy.

“If it wasn’t for those factors, we’d really be in the soup,” he said.

(Newsmax wire services contributed to this report).

© 2018 Newsmax Finance. All rights reserved.

   
1Like our page
2Share
Economy
Former Federal Reserve chairman Alan Greenspan warned Wednesday the U.S. economy is already slowing down and won't be growing at a sustained, annual three percent rate despite optimistic forecasts."The presumption that we are going up from here - I think is wishful...
alan greenspan, economy, grow, gdp, trump, tax, cuts
382
2018-23-13
Wednesday, 13 June 2018 01:23 PM
Newsmax Media, Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved