Recession odds less than 50%, Greenspan says

WASHINGTON (AP) — Alan Greenspan said the odds of a recession have grown since earlier this year, even though “the economy is not doing badly at this stage.”

In an interview with The Associated Press on Monday, the former Federal Reserve chairman put the odds of a recession at greater than one in three. “But best I can judge, it is less than 50 percent,” he said.

Greenspan’s one-in-three prediction earlier this year rocked Wall Street, which has been suffering through a period of turbulence. A deepening housing slump and a spreading credit crunch have raised fears on Wall Street, on Capitol Hill and on Main Street about the country’s economic health.

Many analysts are counting on the Federal Reserve to lower interest rates today to provide some relief.

On other issues, Greenspan said the United States must look at ways to reduce gasoline use both as a matter of national security and to protect the environment.

Greenspan said he favors a tax on gasoline to help curb demand. But recognizing that this could be an “undue burden” on poor people, he suggested a rebate of some sort. There is a national gas tax of 18.4 cents a gallon.

The interview with Greenspan, 81, dovetails with the release and promotion of his new book, “The Age of Turbulence: Adventures in a New World.”

In his book, Greenspan suggests Medicare benefits would have to be cut substantially for the affluent, whom he envisions having copayments approaching 100 percent.

Greenspan ran the Fed for 18 1/2 years, under four presidents, until early 2006. His successor is Ben Bernanke.