Trouble At The Mill

From Holden:

Mr. Andrea Mitchell issues a warning about Chimpy’s drunken-sailor spending while calling for a cautious approach to privatization.

Bloated budget deficits pose a danger to the nation’s long-term economic health, Federal Reserve Chairman Alan Greenspan warned anew Thursday. He issued a fresh call to policy-makers to move swiftly to get the government’s fiscal house in order.

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”The federal budget is on an unsustainable path, in which large deficits result in rising interest rates and ever-growing interest payments that augment deficits in future years,” Greenspan said.

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While Greenspan has endorsed President Bush’s move to let workers set up personal investment accounts as part of an overhaul of Social Security, he has called for a go-slow approach to setting up such accounts. His concern is that massive government borrowing to bring them about could push up interest rates.

Meanwhile, the Dow educates millions of Americans about the differences between risking your retirement security in the markets and a guaranteed benefit.

After running up gains early in the year, the Dow Jones industrial average has fallen more than 9 percent in the last six weeks, including a drop of 115 points, or 1.1 percent, on Wednesday.

The decline could prove temporary. But it occurs just as the White House is preparing to begin discussing the politically painful benefits cuts that would be part of any legislation to put the retirement system on sound footing, and the decline could make it that much harder for Mr. Bush to convince workers that the sweetener he has offered them, a chance to divert part of their payroll taxes to stocks and bonds, is a winning proposition.

“The times are not on his side,” said Irwin M. Stelzer, a conservative commentator and the director of economic studies at the Hudson Institute, a research organization. “You are seeing a Republican Congress saying to itself, ‘He doesn’t have to run again.’ And the market is working against him.”