Greenspan says US 'on the edge' of recession

Updated: 2008-02-15 19:42

Banks have cut back lending and will continue tight controls on borrowing until housing prices backed by subprime mortgages stabilize, said Greenspan.

Greenspan made his comments in response to questions by Daniel Yergin, chairman of CERA.

Greenspan said he would like to see additional use of electric cars.

Nuclear power makes the "most sense" to increase US power generation when all trade-offs are weighed, he said. "We have to use nuclear," Greenspan said.

He said more discussion is needed before any "cap" is created as part of a US cap-and-trade carbon program.

A carbon cap would likely lead to lower economic activity and higher unemployment if one were set before emissions-cutting technology is widespread, Greenspan said.

Greenspan said he doubted that technological advances will solve the problem of growing carbon dioxide emissions.

"If you don't have a significant amount to trade, a lot of people won't be able to trade and won't have the energy they need," Greenspan said.

Stagflation is a period when economic growth is stagnant but when prices rise. Recession is at least two quarters of negative economic growth.

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