is alan greenspan to blame for this mess watch, page-4

Dacata,

The video proposes Alan Greenspan is to blame because he lower interest rates after the Dot.com bust and Sept 11. At the time Greenspan reduced official interest rates to stimulate the economy, down to 1% if my memory serves me correctly.

If you accept this proposal you then have to accept the collary: that the current Federal Reserve is incorrect in reducing interest rates to stimulate the economy to the current low levels, 1.5% I think, and in fact should increase them.

Obviously noone now is proposing that the Federal Reserve was wrong to reduce interest rates now or that they should increase them. It is just easy to do, to come back in six or seven years time and say if the interest rates had not been so low now we would not have these problems at some point in the future.

However, there are otherb things that could have been done back in 2002 that could have reduce or prevent the current problems. 1. More prudent government regulation of the Finance sector, and 2. A tax surcharge on the low resendial interest rates in recognition that in 2002 the Housing market was already in booming times and did not need the same stimulus the rest of the economy needed at the time.

Regards

SP