Thank you Mr. Chairman.
I once again want to thank Alan Greenspan for his leadership at the Federal Reserve. I think
much of the favorable economy we have today is due to his steady hand at the Federal Reserve.
Mr. Chairman, let me make just a few comments about the economy.
First, I am pleased that we finally have a surplus "on paper" for the federal budget. But we still
have a long way to go, we have to stop borrowing from Social Security and we still have a $5
trillion debt. We have to tackle these problems before we can start thinking about adding new
federal spending programs.
Second, we have got to start thinking about a surplus for America's families. Many people I talk
to are comfortable, but they are worried. They have demands to save for their children's college,
their own retirement, and possibly having to care for an elderly parent.
They know these are the good times, but that the business cycle won't last forever. So they
remain somewhat worried about there own future. The job market is full, but not necessarily
stable. And technology is changing so rapidly that many workers remain nervous about their
skills into the future.
My point is that while we have gotten the government's fiscal house finally under control -- we shouldn't be complacent because the Government is taking a combined 38% percent of every family's income -- and that simply is too high.
In my opinion, the result of the large tax burden and the high cost of living is that Americans are
having to rely too much on borrowed funds -- be it credit cards or home equity loans to meet
their daily needs.
This leads me to my last point that Chairman Greenspan touches on in his testimony -- and that is
the risk of unsound loans being made by the banking system in these otherwise good times. One
of the best bankers in this country, John Medlin, told me that these are the worst credit standards
he had ever seen in 40 years of banking. If we have a downturn in the economy, these debt
burdens could present a real crisis for us. I think this Committee has to keep a close watch on
this issue.
Thank you Mr. Chairman.
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