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EAMON JAVERS
Former Federal Reserve Chairman Alan Greenspan Sunday declared that the recession "is over."
Greenspan, appearing on NBC's "Meet the Press," said that the recession has already "bottomed out" and that recovery will come slowly but surely. "It's going to be a slow, trudging thing, but I do think we're going to be moving forward."
For all that, Greenspan said that unemployment will remain stubbornly high this year - which would be political bad news for Democrats in Washington and President Barack Obama. "I think we're going to stay at approximately the 9-10 percent level for a goodly part of this year," Greenspan said. "Its' difficult to make the case that unemployment is coming down any time soon."
The former Fed chief, who has been criticized in the past year for his role in providing the low interest rates that fueled the housing bubble and his insistence while in office that markets could largely regulate themselves, also had a dire prediction for the future of the U.S. position in the world.
Citing the rising deficit and lack of political will in Washington to reduce spending on entitlements like Social Security, Greenspan said, "History tells us that great powers, when they've gotten into very significant fiscal problems, have ceased to be great powers."
And he cited a recent Senate vote as proof that Congress can't bring itself to cut back on spending. "The thing that disturbed me most in the last week or two," he said, "there was a 97-0 vote to exclude Social Security from the deliberations of that [deficit] commission. We have gotten to the point in this country where spending is untouchable. Benefits are going to have to be pared down."
