Rubin criticizes Bush's fiscal policy
By Kathie O'Donnell, CBS MarketWatch
Last Update: 2:06 PM ET Sept. 12, 2004
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BOSTON (CBS.MW) - Former Treasury Secretary Robert Rubin took aim at the Bush Administration over the weekend, calling the fiscal policy of the past three-and-half years "horrendous."
Rubin, an economic adviser to democratic presidential candidate Sen. John Kerry, said the investment banking firm Goldman Sachs is projecting a deficit of $5 trillion to $5.5 trillion over the next 10 years.
That contrasts to the $5.5 trillion, three-year surplus that had been projected three-and-half years ago, Rubin said in an ABC news interview broadcast Sunday.
"What you have right now are very large, enormous projected long-term deficits, which I think are a tremendous threat to our economy," Rubin, who served as treasury secretary under former President Bill Clinton, said in an interview conducted Saturday by George Stephanopoulos.
Rubin, who opposes privatizing Social Security, said the deficit situation makes privatization even less appealing. Privatization initially would require at least $1 trillion over the next 10 years because the government would have to continue paying current retirees while taking part of the payroll tax and putting it into private accounts, he said.
"It would add another deficit on top of the large deficits we already have," Rubin said. "So I think the fiscal policies of the last three-and-a-half years have thrown away that option even if it was one that should have been considered, which I don't personally think it should have been."
While many studies show that stocks will outperform bonds over the "long, long run," stocks can also behave in "difficult and troubling" ways, said Rubin, who started his finance career at Goldman Sachs in 1966 and now is chairman of the executive committee at Citigroup(C: news, chart, profile).
"I do not think that people's retirement should be exposed to the risk of stock markets," he said. |
