Alan Greenspan: Notion that foreigners are ripping us off is ‘nonsense’

Former Federal Reserve Chairman Alan Greenspan said Wednesday that he rejects the Trump administration’s claims that foreign countries are taking advantage of the U.S. on trade issues.

Greenspan made the remark in an interview with CNBC, when asked by anchor Sara Elsen whether the U.S. was in a trade war with Canada and other countries hit by the administration’s tariffs on steel and aluminum imports.

{mosads}”We’re on the edge. I think we should be very sad if we do, because the presumption is that foreigners are ripping us off. It’s nonsense,” Greenspan said.

The former Fed chief added that the tariffs recently implemented by the White House would likely affect the U.S. economy “not terribly much,” but would do more harm to the economies of U.S. allies.

Greenspan then went on to praise the Trump administration’s efforts to reform the tax code, pointing to measures in the GOP tax plan passed in December that he supports, while warning that gross domestic product (GDP) will likely not sustain a 3 percent level of growth.

“The fact is, I happen to approve of some of the policies which this current administration is doing,” he told CNBC. “The extraordinary cut in the marginal corporate tax rate was a very important thing. I never thought I would see it in my lifetime, but they pulled it off. It’s working, and it’s having an effect.”

“What I don’t think is going to be happening over time is GDP that stays close to the 3 percent,” Greenspan added. “Entitlements are crowding out gross domestic savings.”

Republicans on the House Budget Committee announced in February that they were looking at entitlement spending, including for programs like Medicare and Social Security, as a way to cut the deficit.

“We’ve got to have an opportunity to look at these from top to bottom, and then come up with what we believe are solutions that can be politically doable,” Rep. Steve Womack (R-Ark.) said earlier this year.

“That’s what the Budget Committee process will begin to do.”