Former Fed Chair Greenspan: We are on the edge of a trade war

Author: Greg Michalowski | Category: News

Speakling on CNBC

  • Perception is foreigners are ripping us off. That is nonsense
  • It is true that merchandise trade is 800B but more than 1/2 is offset by services
  • A tariff is a tax on the US
  • The trade deficit is largely initiated by the US citizens demand
  • Does not expect GDP to stay close to 3% because entitlements are crowding out gross domestic savings. Gross domestic savings coupled from borrowed from abroad, finances gross domestic investment. Gross domestic investment give productivity.  
  • Productivity is key to economic outlook and that is very low.
  • We are moving into stagflation.  We will consistently see downward pressure on real economic growth 
  • If it weren't for change in the marginal tax rate and the deregulation we would really be in the soup. 
  • Wishful thinking that we are going up from here though
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