In the Senate Banking Committee this week, Federal Reserve Chairman Alan Greenspan flashed a yellow light for PRAs. “So if you’re going to move to private accounts, which I approve of, I think you have to do it in a cautious, gradual way,” said Greenspan. His primary concern: increasing the deficit.
Senate Banking Chairman Richard Shelby (R.-Ala.) asked, “Could we create the personal accounts without any substantial borrowing for the transition? And if so, how?” Greenspan responded: “Obviously, if you raise taxes, you could.” Then Shelby asked, “What about cutting benefits? One of those two.” To which Greenspan said: “You could certainly do it that way, too.” What Shelby did not ask: Can’t we do it by cutting unnecessary and unconstitutional federal spending?