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Greenspan warns not to pay down debt { March 22 2001 } Original Source Link: (May no longer be active)    http://www.senate.gov/~budget/republican/about/hearing2001/PVD322.htm http://www.senate.gov/~budget/republican/about/hearing2001/PVD322.htm OPENING STATEMENT of SENATOR PETE V. DOMENICI Hearing on Debt Management March 22, 2001 Good morning. I want to thank everyone for coming here today and I’m looking forward to a lively exchange of views. We have a very distinguished panel. Until recently, Gary Gensler was Treasury Undersecretary for Domestic Finance. Ward McCarthy is the co-founder of Stone & McCarthy Research Associates, a major provider of financial-market and economic information. Ted Truman is a senior fellow at the Institute for International Economics and was, until recently, Assistant Treasury Secretary for International Affairs. Albert Wojnilower is a senior economic advisor to Craig-Drill Capital and for over 25 years was chief economist for Credit Suisse First Boston. Paying down the debt may seem like a new issue to us, but it is not a new issue for the country. Back in 1887, President Grover Cleveland – a Democrat – said that large budget surpluses were turning the Treasury into a "hoarding place for money,...preventing investment in productive enterprise, threatening financial disturbance, and inviting schemes of public plunder." Like President Cleveland, President Bush sees large budget surpluses as a reason to cut taxes. The President’s budget will also use the surpluses to pay down $2 trillion in debt over the next 10 years. Debt reduction is a wonderful thing, but retiring too much debt too fast would require the payment of "penalty premiums." Chairman Greenspan recently noted that getting many bondholders, particularly foreign bondholders, to discard their Treasuries prior to maturity would be – in his words – "extraordinarily expensive and obviously undesirable." In fact, a large portion of the penalty premiums would go to foreign bondholders, who own 42% of the privately-held debt – and this percentage is growing. As bad as it would be to use the surpluses to pay down debt too quickly, another scenario is even worse: letting the government use the surpluses to accumulate private assets. Make no mistake: I strongly oppose government accumulation of private assets. This is one of the reasons I support President Bush’s tax plan. If taxes are not cut, the money will either be spent or used to accumulate assets. Taxes need to be cut and the sooner the better. Having said that, I’d like to turn to the Ranking Member who will also make a statement and then we’ll proceed to our witnesses.

Billions in federal lands sold off { December 3 2007 } Budget deficit hits 374b { October 20 2003 } Buffett attacks america as rich spending junkies { March 7 2005 } Buffett makes billions betting against dollar { March 5 2005 } Bush presides over biggest spending since 1990 Cheney says deficits dont matter { January 12 2004 } China holds the mortgage to the dollar { August 31 2005 } China loses faith in dollar Congress approves 1tr debt { May 27 2003 } Debt near ceiling again { February 20 2003 } Fd chair blames long term rates on world savings glut { March 20 2006 } Federal deficit estimated almost another trillion { January 25 2005 } Financial crisis if foreign investors pull out { November 21 2005 } Foreign investors finance US debt by 2b a day Government borrows billion a day { October 8 2004 } Greenspan leaves us with record debt { January 23 2006 } Greenspan warns not to pay down debt { March 22 2001 } Raise debt limit Raises debt limit { June 27 2001 } Republicans raise debt limits to 9 trillion { March 17 2006 } Short term yields above long term in reinversion Snowballing debt awaits taxpayers { December 1 2003 } Treasury needs to raise 8 trillion debt limit { February 2006 } UN calls for asian help US deficits { January 26 2005 } US debt tops 9 trillion for first time { October 2007 } War spending drives record deficit estimate Whitehouse urges raise debt ceiling { May 20 2003 } Files Listed: 27

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