WASHINGTON (MktNews) - The following is a transcript of the remarks of Federal Reserve Chairman Alan Greenspan Wednesday morning to the Senate Banking Committee on future expectations about U.S. productivity growth:
"The current services budget surplus has essentially been based on a 2.5% productivity increase annually. The Goldman Sachs analysis brought it down to 2.25% as I recall, but they were coming originally from 2.75%. Those are disputable calculations.
"I was about to say, however, there is, you know, very legitimate questions with respect to how one comes at these types of forecasts and it was a fairly sophisticated approach and I read it very closely, but you have to remember that we economists go by issues very quickly and sometimes when you dig a little deeper there are some other questions. So, just to say specifically that, in my judgment, I don't think we're down that far. In other words, so I would not agree with the conclusion.
"Usually translating the change of productivity in surpluses is relatively straightforward, but remember, we're talking about current services budgets here.
"I don't see any fundamental long-term changes. In other words, I do think that when the 2.5% productivity growth estimate came out it was overly conservative. What one may readily argue at this stage is that it's less conservative than it was at the time it was done. I don't see anything indicating per se at this particular point which should lead one to make any major revisions in the current services surplus. Obviously, if the Congress moves forward on taxes and on the expenditure side you shift to actual budget surpluses, which are clearly going to be less than the current services number."