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Greenspan: “We can guarantee cash benefits as far out and at whatever size you like”

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[embedded content] Greenspan: "We can guarantee cash benefits as far out and at whatever size you like"FEBRUARY 16, 2005 COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS, UNITED STATES SENATE  GREENSPAN: I think we should maintain the principles of Social Security, but I think the existing structure is not working, and that until we can construct a system which creates the savings that are required to build the real assets so that the retirees have real goods and services, we do not have a system that is working. We have one that basically moves cash around, and we can guarantee cash benefits as far out and at whatever size you like, but we cannot guarantee their purchasing power. This is why the issue ultimately has to be resolved in terms of do we have the material goods and services

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Greenspan: "We can guarantee cash benefits as far out and at whatever size you like"

FEBRUARY 16, 2005 COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS, UNITED STATES SENATE 


GREENSPAN: I think we should maintain the principles of Social Security, but I think the existing structure is not working, and that until we can construct a system which creates the savings that are required to build the real assets so that the retirees have real goods and services, we do not have a system that is working. We have one that basically moves cash around, and we can guarantee cash benefits as far out and at whatever size you like, but we cannot guarantee their purchasing power. This is why the issue ultimately has to be resolved in terms of do we have the material goods and services that people will need to consume, not whether or not we pass some hurdle with respect to how financing occurs, because the financing is a secondary issue, and it is the means to create the real wealth, not an end in itself.


Mike Norman
Mike Norman is an economist and veteran trader whose career has spanned over 30 years on Wall Street. He is a former member and trader on the CME, NYMEX, COMEX and NYFE and he managed money for one of the largest hedge funds and ran a prop trading desk for Credit Suisse.

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