Economic growth won’t last as the U.S. labors under the burden of growing entitlement programs and weakness around the world, former Federal Reserve Chairman Alan Greenspan told CNBC.
The long-time central bank chief repeated his warnings about the weight that Social Security, Medicare and other programs are having on what have been otherwise solid gains over the past few years.
“I think the real problem is over the long run, we’ve got this significant continued drain coming from entitlements, which are basically draining capital investment dollar for dollar,” he told CNBC’s Sara Eisen during a “Squawk on the Street ” interview.
The rise in the welfare state since 1980 — it’s current extent — was only possible because much of the money was newly manufactured. With money manufacture slowing since the GFC of 2008, even with interest rates at emergency levels for the last decade, the current level of welfare is not sustainable.