Alan Greenspan Replacement - The Best Choice

Discussion in 'Economics' started by SouthAmerica, Aug 26, 2005.

  1. .

    SouthAmerica: The clock is ticking on the Alan Greenspan era. Greenspan's term ends in January, when his term as Fed governor expires on Jan. 31, 2006.

    On radio and on television shows lately a lot of people are asking: Who will be the next Fed Chairman?

    The media is reporting a short list of candidates who are under Bush’s consideration as a possible successor to Alan Greenspan at the Fed and they are: Martin Feldstein of Harvard University, Glenn Hubbard, a former head of Bush's Council of Economic Advisors; and Ben Bernanke, who left the Fed to head the CEA earlier this year, and Lawrence Lindsey the architect of Bush’s tax cut plan. Among the other names being considered for the job are: Donald Kohn, Roger Ferguson, and John Taylor. Probably the best candidate for the job is not being mentioned today by anyone, but I would put his name on top of the list of people to replace Alan Greenspan.

    We have to keep in mind that after Greenspan retires, the US can’t afford to do business as usual. Greenspan’s successor will inherit an economic mess, and a global economic situation that is foreign to most of the “business as usual” type of economists.

    Today the reality is that the United States lost its independence, because America is buried under a pile of debt, and Americans are no longer “Masters of their own destinies.”

    You can live in the world of illusion if you want, but your masters today live in Asia. They call the shots these days; without their financing to keep America afloat, the US economy would sink like the “TITANIC.”

    Today, the United States has outstanding debt of over $ 3 trillion dollars that the US has borrowed from foreigners. The US is the biggest debt-nation that we ever had in our planet. These people that lent the money to you are your real “Masters.”

    Please don’t fool yourself in thinking that the US rules the world today. A real world power would not do it on credit from foreigners; including their enemies.


    Alan Greenspan, Federal Reserve Chairman, successor should be: Stephen S. Roach - (Chief Economist and Director of Global Economic Analysis at Morgan Stanley's Global Economics Team)

    Since September of 2004 I have been advocating that Mr. Greenspan had a good run at the Federal Reserve, but it is time for him to retire, and give the opportunity to a new person.

    He had a good run as Chairman of the Fed, but it is time for him to retire and give that job to someone who understands what is happening in the new global economy.

    If I were making the decision to pick a replacement for Alan Greenspan, I would offer the job to: Stephen S. Roach - (Chief Economist and Director of Global Economic Analysis at Morgan Stanley's Global Economics Team)

    In my opinion the most qualified economist today, here in the United States, for the job of chairman of the Federal Reserve is Mr. Roach. He has a better understanding and grasp of many issues related to the global economy better than anyone that I know of. He is the best candidate for the job.

    He is the best person in terms of qualification and practical experience to replace Alan Greenspan. Mr. Roach has a deep understanding of how outsourcing affects the US economy, and also the job market in the US.

    He also understands that the US can’t go on borrowing 89 percent of the entire planet’s savings forever. Today the US government-borrowing binge reminds me of two corporations; “ENRON” and “WORLDCOM”

    President George W. Bush should not wait until January 2006 to replace Mr. Greenspan. He should ask Mr. Alan Greenspan for his resignation as soon as possible, and should offer the job to Mr. Stephen S. Roach – since he is the best candidate for the job.

    Today, we need an “Outstanding Fed Chairman”; someone with an outstanding record at the FED such as “Paul Volcker,” and Mr. Stephen S. Roach has the potential to become the new Paul Volcker of the future.

    I don't know if Mr. Roach is a democrat or a republican, all I can say is that he is the best man for that job based on his great understanding of the very complex global economy.

  2. .

    SouthAmerica: The key word here is "Replacement" and not "Successor"

    President George W. Bush should not wait until January 2006 to replace Mr. Greenspan. He should ask Mr. Alan Greenspan for his resignation as soon as possible, and should offer the job to Mr. Stephen S. Roach – since he is the best candidate for the job.

  3. gnome


    ANYBODY BUT BERNANKE... That SOB will ruin America!!
  4. I'm busy...
  5. wouldn't you say that the Asian countries economies rest on selling/servicing the US as well? Of course, the US shouldn't be relying so heavily of foreign production/service though.
  6. Holmes


    No, I am ill and in & out of the hospital.

    Perhaps Nick Leeson? He has experience of Asia.

  7. a bag of hammers would be an improvement
  8. gnome


    Meant to say, "... He will ruin America faster than the other guys."
  9. .

    SouthAmerica: Greenspan became Fed chairman in August 1987 at the time the cumulative US public debt was $ 2.4 trillion dollars as of 9/30/1987.

    During Alan Greenspan watch at the Fed the cumulative US government debt reached $ 7.9 trillion dollars on 8/24/2005. The US Total Public Outstanding Debt increased by 330 percent.

    Here is the actual Historical Data for Interest Expense Paid on US Outstanding Debt - FISCAL Year Ending 9/30 of each year.

    YEAR - Amount of Interest Paid

    2005 - $ 314,909,670,536.68*
    2004 - $321,566,323,971.29
    2003 - $318,148,529,151.51
    2002 - $332,536,958,599.42
    2001 - $359,507,635,242.41
    2000 - $361,997,734,302.36
    1999 - $353,511,471,722.87
    1998 - $363,823,722,920.26
    1997 - $355,795,834,214.66
    1996 - $343,955,076,695.15
    1995 - $332,413,555,030.62
    1994 - $296,277,764,246.26
    1993 - $292,502,219,484.25
    1992 - $292,361,073,070.74
    1991 - $286,021,921,181.04
    1990 - $264,852,544,615.90
    1989 - $240,863,231,535.71
    1988 - $214,145,028,847.73

    *Note: includes only 10 months of interest expense for year 2005.
    All the above figures are actual US dollars paid each year in interest by the US government on US government outstanding debt.

    During the 18 years that Alan Greenspan has been Fed Chairman (August 30, 1987 – July 30, 2005) the US government paid out $ 5. 8 trillion dollars in interest expense on its - humongous, extremely large, enormous, huge, monstrous, and tremendous – US Government Outstanding Public Debt.

    Source: US Department of the Treasury – Bureau of the Public Debt
    And US Department of Commerce - BEA – Bureau of Economic Analysis

    The cumulative US national debts were only $ 930 billion dollars as of December 31, 1980 - right before Ronald Reagan became president of the United States. Here is the detail of the additions to the US national debt by president:

    Ronald Reagan (8 years in office) added to US debt $ 1.7 trillion dollars.
    George Bush Senior (4 years in office) added to US debt $ 1.5 trillion dollars.
    Bill Clinton (8 years in office) added to US debt $ 1.6 trillion dollars.
    George Bush Junior (first term, 4 years in office) added to US debt $ 1.8 trillion dollars.
    George Bush Junior (second term, 1 year in office) added to US debt about $ 500 billion dollars.

    Since December 31, 1980 the Republican presidents added $ 5.5 trillion dollars to the cumulative US national debt, and the Democratic president added $ 1.6 trillion dollars.

    The Republican administrations added 77 percent of the new US national debt since December of 1980, and the Democratic administration added only 23 percent of the new debt. Since December 31, 1980 the United States had only one fiscally responsible president - former president Bill Clinton - a democrat.

    Note (1): During Alan Greenspan watch – in the last 4 years - George W. Bush started two wars (Iraq and Afghanistan) and at the same time the US government approved large tax cuts – moving the country from a position of government budget surpluses to a position of massive government budget deficits.

    Note (2): According to Federal Reserve data as of September 2004 the cumulative outstanding debt of the states were $ 2 trillion dollars.

    When we add the federal, state and county government outstanding debt – then we have over $ 10 trillion dollars of current outstanding debt.

    On top of that there is another $ 70 trillion dollars in outstanding liabilities related to government Pensions, Social Security, Medicare, Medicaid, and other entitlements.

    If we add on top of that other US government guaranties such as private pension system, and all kinds of other US government guaranties – then just “God” knows the trillions of current potential liabilities that can end up some day on the US governments lap.

    When we compare this level of liabilities on the balance sheet of the US government with companies such as Enron, and WorldCom before they went out of business – then we realized that these two companies were very well managed when compared with the current financial position of the US government.

    In my opinion Paul Volcker was an outstanding Fed Chairman and he did a great job. Regarding Alan Greenspan, only time will tell the entire story, and he is too old to see the real results of his performance as Fed Chairman.


    August 27, 2005

    SouthAmerica: Compare the above information with the following: - Two years ago when Lula became president of Brazil – the cumulative debt of the Brazilian government was $ 250 billion dollars. Since then the Lula government were able to reduce the cumulative debt of the Brazilian government to $ 180 billion dollars. The Brazilian government has reduced the cumulative outstanding debt of the Brazilian government by 25 percent.

    Today, the United States government cumulative outstanding debt is so - humongous, extremely large, enormous, huge, monstrous, and tremendous – that the interest that the US has to pay every year on the US outstanding debt is almost twice than the total cumulative outstanding current debt of the Brazilian government. (current cumulative debt of the Brazilian government estimated at $ 180 billion dollars compared with interest paid by the US government of $ 360 billion dollars for fiscal year ending September 30, 2005).

    Note: The above information is being posted also in the Financial Times of London website under my name:
    Ricardo C. Amaral

  10. cable


    Stephen Roach is excellent and insightful and I read his market research regularly. He'd be an excellent pick if we wanted to slowly and wisely heal our decaying economy by attacking the root problems. However, the purpose of the Fed Chairman is not to fix the economy (which Roach would try to do), but to prop up an irresponsible and reckless system while creating an atmosphere of rampant borrowing and unnecessary spending which will ultimately lead to the death of America as we once knew it.

    Therefore, I recommend Kenneth Lay.
    #10     Aug 28, 2005