Greenspan: Throw Cash At Mortgage Crisis

by: Tim Iacono

Wow! Talk about moral hazards. Is it possible there could be a bigger moral hazard than Alan Greenspan's proposed solution to the housing crisis?

"Cash from the government", presumably deposited directly into the bank accounts of homeowners who are about to lose their homes, is the former Fed Chairman's solution to the current foreclosure crisis. He added, "Cash is available and we should use that in as large amounts as is necessary to solve the problems".

[You might think I'm starting to just make this stuff up but I'm not.]

The Maestro was on ABC's This Week with George Stephanopolus yesterday and weighed in a variety of subjects, none of which involved any culpability on his part for the mess that is the current U.S. economy and global financial system.

Greenspan ran the central bank for more than 18 years and, in response to the bursting of the stock market bubble, he succeeded in inflating a housing bubble just before he was forced to retire.

The delayed effects of these policies will see the U.S. economy run into the ground sometime next year.

He has been criticized by some for keeping interest rates too low for too long after the 2001 recession and now most analysts agree that leaving an 80-year old to run the largest economy in the world was just a bad idea.