Greenspan, while worried about the outlook and what is happening with the housing market, said when it comes to a double-dip recession, “the probability of that is going down.” Given all the ground the economy has lost, “the tinder for a double-dip is not readily available,” although he added if housing goes down “all bets are off.”
Greenspan said that the U.S. needs to do something now to deal with budget deficits and it must do something very soon. He explained his anxiety is so high that “I’m coming out in the first time in my memory” in support of higher taxes in addition to reduced spending, including allowing the so-called Bush tax cuts to expire.
“Our choice is not between good and bad; it’s between terrible and worse,” Greenspan said. The nation has “a level of commitment … which I don’t think we can psychically meet,” absent huge changes in how the government finances itself.
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