Greenspan: Edwards plan would hurt economy

Dec. 16, 2007 at 9:05 PM
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WASHINGTON, Dec. 16 (UPI) -- Former Federal Reserve Chairman Alan Greenspan said Sunday Democratic presidential contender John Edwards' economic proposals would hurt the U.S. middle class.

Greenspan, speaking on ABC's "This Week with George Stephanopoulos," said Edwards, a former North Carolina senator, is correct that middle class economic growth is stagnating "but his remedies will make it worse, not better."

Edwards has advocated a freeze on mortgage foreclosures and a rescue fund to help families out of their mortgage dilemmas. But Greenspan said it's important to help those people without affecting mortgage rates or affecting market structures.

"Cash (from the government) is available and we should use that in as large amounts as is necessary to solve the problems of the stress ...," 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. If you do that, it will drag this process out indefinitely."

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