Take a quick stroll down memory lane to January 2001. Whipper-snappers today were super-whipper-snappers probably just entering high school. The economy was so-so, the election outcome was kind of crappy, but all in the all things were all right. Maybe more than all right. Alan Greenspan told the Senate Committee that the government had TOO MUCH money and paying down the debt too quickly. Very different days. See below for transcript and video
*Greenspan: If things keep on, total unified surplus will be 800 billion in 2011
TEXT: The most recent projections from the OMB indicate that, if current policies remain in place, the total unified surplus will reach $800 billion in fiscal year 2011, including an on-budget surplus of $500 billion. The CBO reportedly will be showing even larger surpluses. Moreover, the admittedly quite uncertain long-term budget exercises released by the CBO last October maintain an implicit on-budget surplus under baseline assumptions well past 2030 despite the budgetary pressures from the aging of the baby-boom generation, especially on the major health programs.
VIDEO: http://www.c-spanvideo.org/...
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Greenspan: It looks like we can pay off the debt by the end of the decade (2010)
TEXT: The most recent projections, granted their tentativeness, nonetheless make clear that the highly desirable goal of paying off the federal debt is in reach before the end of the decade. This is in marked contrast to the perspective of a year ago when the elimination of the debt did not appear likely until the next decade.
VIDEO: http://www.c-spanvideo.org/...
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*Greenspan: We are so flush with cash, we might need to store it in private assets
TEXT: But continuing to run surpluses beyond the point at which we reach zero or near-zero federal debt brings to center stage the critical longer-term fiscal policy issue of whether the federal government should accumulate large quantities of private (more technically nonfederal) assets. At zero debt, the continuing unified budget surpluses currently projected imply a major accumulation of private assets by the federal government. This development should factor materially into the policies you and the Administration choose to pursue.
VIDEO: http://www.c-spanvideo.org/...
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Wow.
Full Video: http://www.c-spanvideo.org/...
Transcript: http://www.federalreserve.gov/...