Economic growth will not continue as long as the US is working under the burden of growing growth programs and weakness around the world, said former Federal Reserve Chairman Alan Greenspan versus CNBC.
“Without major changes in claims, claims will increase. Why? Because the population is ageing. There is no way to reverse this, and politics is terrible, as you know,” Greenspan added.
While he said that the economy looks “relatively good” in the short term, he expects growth to “fade very dramatically”in the longer term.”
“I think the real problem is in the long run, we have this significant ongoing outflow of rights that basically drain investment dollars for dollars,” he told CNBC Sara iron during a “Squawk on the Street” interview.
The man known as” Maestro”, who led the Fed for 19 years from Reagan to George W. Bush, spoke of signs of growth in recent times more positively. In their latest GDP forecast, the Fed now sees an increase of 2.3 per cent. A month ago, The tracker was still 0.2 percent.
Greenspan, however, said that the improvement is much due to an increase in stock market prices: he sees a” stock market aura ” in the economy. An increase of 10 percent in the S&P 500 corresponds to an increase in real GDP of 1 percent, he said. The S & P 500 has risen by almost 16 percent in 2019 and is on track for its best performance in history, should keep current trends.
The economy ‘ will start to fade because Europe is not doing well and we still have a problem where there is a very large tax problem with claims.”