‘It’s a smaller economy now…entitlements are crowding out savings and capital investment.’

Former Federal Reserve Chair Alan Greenspan was on CNBC’s Closing Bell program today echoing some of the sentiments shared in my post here earlier today.

The way I measure it, it’s probably tantamount to what we saw in the later stages of the Great Depression,

The former Fed Chair declared the economy is in ‘not strong’ (read: horrible) shape. Demand for U.S. Treasuries is weakening. And the 4th quarter growth numbers are likely going to be downgraded when they’re released on Friday:

Everyone expects that the growth rate for the fourth quarter is going to be about 2 percent, which is a downward revision from the earlier version. And it may even be less than that.

He also looked at the productivity numbers — the main driver of a growing economy — and declared it weak.

Capital investment is key to productivity growth. That has slowed down quite dramatically and productivity has followed right along.

And then he said what many have known since the first time President Obama uttered the word stimulus:

‘It’s a smaller economy now…entitlements are crowding out savings and capital investment.’