USA Today reports former Federal Reserve Board Chairman Alan Greenspan "suggested Sunday that a tax break or other government financial help for homeowners facing the mortgage crunch would be the best political fix for the economy," but he "cautioned against meddling with home prices or interest rates to address the housing problem." On ABC's "This Week," Greenspan said, "Cash is available and we should use that in larger amounts, as is necessary, to solve the problems of the stress of this."
The Financial Times reports Greenspan's remarks were "likely to fuel growing political pressure for a more radical response to the housing crisis." The New York Times reports, "Two ways to help homeowners directly would be to reduce taxes or to give cash grants similar to those given to disaster victims. Either approach would strain the federal budget, but Mr. Greenspan said, 'It's far less damaging to the economy to create a short-term fiscal problem, which we would, than to try to fix the prices of homes or interest rates.'"
Greenspan Has Stagflation Concerns The Christian Science Monitor reports that from "toys and airline tickets to food, gasoline, and jewelry, inflation is squeezing the American economy at a time when it's already struggling." Greenspan "says he's beginning to worry about the inflation numbers." On ABC's "This Week," Greenspan said, "We are beginning to get not stagflation, but the early symptoms of it."
