Greenspan 0n SS & Creative Destruction

Henry C.K. Liu hliu at mindspring.com
Wed Mar 3 08:12:37 PST 1999


Testimony of Chairman Alan Greenspan On investing the social security trust fund in equities Before the Subcommittee on Finance and Hazardous Materials, Committee on Commerce, U.S. House of Representatives March 3, 1999

Only an increase in national saving or an increase in the efficiency with which we use our saving can help us meet the retirement requirements of the coming years. Indeed, improved productivity of capital probably explains much of why the American economy has done so well in recent years despite our comparatively low

national saving rate. For productivity and standards of living to grow, financial capital raised in markets or generated from internal cash flow from existing plant and equipment must be continuously directed by firms to its most profitable uses--namely new physical capital facilities perceived as the most efficient in serving consumers' multiple preferences. It is this continuous

churning, this so-called creative destruction, that has become so essential to the effective deployment of advanced technologies by this country over recent decades.

Full Testimony: http://www.bog.frb.fed.us/boarddocs/testimony/current/19990303.htm



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