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Alan Greenspan Expects Growth AND 10+% Unemployment

2009_10_greenspan.jpg Former Federal Reserve Chairman Alan Greenspan gave his predictions on the economy and unemployment: He thinks the economy will grow 3% in the third quarter (which is more than he previously thought)—and that unemployment will break through 10% and be there for a while.

On This Week with George Stephanopoulos, Mr. Irrational Exuberance said the latest job numbers (revealing 9.8% unemployment) were "pretty awful" and was most alarmed by the large of number of the long term unemployed: "The reason that is a problem, obviously, other than the obvious personal difficulties that families have in such a context, is that the economy loses skills. And people who are out of work for very protracted periods of time, lose their skills eventually...Remember that what makes an economy great is a combination of the capital assets of the economy and the people who run it. And if you erode the human skills that are involved there, there is a real and in one sense an irretrievable loss."

He also thinks a second stimulus isn't necessary (apparently doing too much might be bad!) and that health care reform won't add to the deficit but "revenue neutral is not adequate." And flashback: A year ago, Greenspan admitted he was wrong to think the markets could regulate themselves.

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Comments [rss]

  • NannyState

    A nation in rapid decline doesn't need employment, it just needs more five-star resorts.

  • Shinobi Shaw

    The Media are truly delusional, here we have an unemployment rate that keeps getting higher and a bad economy.

    The Media only follows those who are doing well in this economy i.e. the top 1%.

  • Steven

    Watching the news on tv you'd think the economy is back on its feet and doing so well with the stock market going up.

  • FJF

    I thought we were past the point of taking this schmuck's word as gospel.

  • hotstepper

    yeah the economy is doing great Dr. Oracle. since it is his cronies in private equity firms who are plundering what's left of american industry and then hanging the companies and workers out to dry. go free market, go!

    http://www.nytimes.com/2009/10/05/business/economy/05simmons.html?_r=1&hp

  • Mr Mel

    I thought he was no longer considered a Pundit.

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