Greenspan Channels Ayn Rand, Says Moderate Recession is Best Case Scenario

November 16, 2012 12:03 PM EST
Former Federal Reserve Chairman Alan Greenspan is looking beyond the so-called fiscal cliff, and he sees a much different world in terms of taxes and social benefits.

Speaking on Bloomberg Televisions, Greenspan said "we may get a deal, which will take us for next year or so. But the question isn't that. I think the question is essentially how are we going to stop what is a critical problem here, an extraordinarily rapid rise in what the department of commerce calls government social benefits to persons."

Greenspan, a friend of objectivist writer and philosopher Ayn Rand, thinks social programs are eating into savings and the country's long-term growth.

"The problem is, if we are going to come to grips with this thing, we are going to have to recognize that even if we have got to pay the cost of a significant rise in taxes to get a significant slowing and then decline in social benefits, that is a very cheap price in the sense that a large increase in taxes required to fund what is currently on the books is going to cause a recession," said the Form Fed Chairman.

"If we get out of this with a moderate recession, I would say that the price is very cheap," concluded Greenspan.

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