Some Americans are a little nervous about the nation’s future, but others feel secure, knowing that the man they consider the most powerful person in the world isn’t going anywhere.
Just who is this behind-the-scenes guy they think has more power than George W. Bush ever will He’s Alan Greenspan, a 74-year-old expert economist who heads the Federal Reserve, commonly known as the Fed. Unlike the president, who has to please the voters and compromise with Congress, Greenspan doesn’t have to answer to anyone.
But that doesn’t mean his job is easy.
Basically, Greenspan is in charge of keeping the nation’s economy stable. The economy is sort of like a balloon: blow in too much air, and it pops. But with too little air, it falls to the floor. Greenspan helps decide when to blow more air into the economy. In this case, the air in a balloon is the amount of money in the economy. Greenspan can make the economy grow by increasing the money supply, or keep the economy from inflating too much by decreasing the money supply. His goal is for the economy to grow and contract gradually. Rapid changes can harm businesses and consumers.
After years of very nigh growth, the American economy is starting to slow down. Recently, corporations have been making less money and people are starting to have a harder time finding jobs. Greenspan is hoping to ease the economy into a soft landing. It’s just like to make the car come to a gentle stop instead of hitting a brick wall. If he succeeds, the country will avoid two possible problems: rising prices and high unemployment.
At the Fed’s meeting, Greenspan and the other members decided that the economy was growing at an OK rate, but that there is a possibility of a serious slowdown, and in order to solve that, they could lower interest rates at the next meeting in an attempt to encourage people to borrow and spend.
While there’s no way to know what they will decide, one thing is certain: the decisions that Greenspan and the Federal Reserve Board make will affect everyone who earns, borrows or spends money.