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CNBC EXCERPTS: FORMER FEDERAL RESERVE CHAIRMAN DR. ALAN GREENSPAN ON CNBC'S "SQUAWK BOX" Today, FRIDAY, JUNE 3RD

WHEN: TODAY, FRIDAY, JUNE 3RD 7AM-8AM ET

WHERE: CNBC'S "SQUAWK BOX"

Following are excerpts from the unofficial transcript of a CNBC interview with Former Federal Reserve Chairman Dr. Alan Greenspan on CNBC's "Squawk Box" today, Friday, June 3rd 7AM-8AM ET live from the Labor Department. All references must be sourced to CNBC.

GREENSPAN ON MARK HAINES:

"I WAS TRULY SADDENED BY THE PASSING OF MARK HAINES, HE WAS SUCH A FIXTURE, ESPECIALLY SQUAWK BOX, FOR YEARS AND YEARS AND YEARS, AND HE'LL BE SORELY MISSED."

GREENSPAN ON TAX STRUCTURE:

"THE FACT THAT I AM IN FAVOR OF GOING BACK TO THE CLINTON TAX STRUCTURE IS MERELY AN INDICATION OF HOW SCARED I AM ABOUT HOW THIS DEBT PROBLEM HAS EMERGED AND ITS ORDER OF MAGNITUDE."

GREENSPAN ON WHERE WE ARE HEADED:

"I THINK I KNOW WHERE THE ACTUAL COMPROMISE WILL OCCUR; AND ITS BASICALLY GOING TO BE SOMETHING LIKE GOING BACK TO THE CLINTON TAX STRUCTURE AND SIMPSON BOWLES AND WITH A LITTLE SEGMENT IN THERE WHICH IS NOT IN SIMPSON BOWLES ON MEDICARE, I MEAN THAT TO ME IS WHERE WE ARE ALL HEADING; THE PROBLEM IS THAT WE'RE ALL GOING AND MANEUVERING AROUND AND AS THE DAYS PASS WE'RE GETTING CLOSER AND CLOSER TO THE DEBT CEILING"

GREENSPAN ON THE RYAN BUDGET:

"IF I HAD MY OWN WAY I LIKE THE RYAN BUDGET IN ALL RESPECTS AND I THINK THAT ESSENTIALLY THAT SORT OF THING IS WHAT I WOULD VOTE FOR, IF IN FACT I WERE VOTING. BUT THE PROBLEM ESSENTIALLY IS THAT IS NOT GOING TO GET A MAJORITY VOTE IN THE CONGRESS OR BE SIGNED BY THE PRESIDENT OF THE UNITED STATES."

GREENSPAN ON THE TREASURY:

"THE CRITICAL ISSUE THAT WE HAVE TO BE VERY CAREFUL ABOUT WITH RESPECT TO THE FINANCIAL SYSTEM IS THAT DEBT SERVICE IN THE US TREASURY CONTINUES AS IS; I CAN NOT CONCEIVE OF ANY SECRETARY OF THE TREASURY OR FOR THAT MATTER ANY PRESIDENT BASICALLY FORFEITING ON US TREASURY ISSUES."

GREENSPAN ON DODD FRANK:

"I DON'T THINK THAT THE CONCEPTUAL FRAMEWORK OF HOW THE FINANCIAL SYSTEM WORKS IS PROPERLY CAPTURED IN THE PHILOSOPHY OF DODD FRANK; IN OTHER WORDS THEY'RE SPECIFYING THAT IF YOU DO THIS, THIS WILL HAPPEN, ALL THE EVIDENCE OF WHICH I'M AWARE OF IS IT WILL NOT."

GREENSPAN ON DODD FRANK:

"THERE'S ALL GOOD INTENT IN THE BASIC PURPOSE OF A LOT OF WHAT'S IN DODD FRANK IS ON THE BASIS OF THINGS WHICH WENT ON DURING THE BUILD UP TO THE CRISIS WHICH CLEARLY WERE EGREGIOUS ACTIONS ON THE PART OF MANY PEOPLE."

GREENSPAN ON THE ECONOMY:

"GOING THROUGH THE ECONOMETRICS OF HOW WEALTH EFFECTS IMPACT ON GDP IF YOU LOSE THE GOVERNMENT SPENDING AND YOU GET IT BACK IN CAPITAL GAINS THEN THE ECONOMY WILL CONTINUE."

GREENSPAN ON THE DEBT CEILING:

"I THINK THE WHOLE ISSUE OF A DEBT CEILING MAKES NO SENSE TO ME WHATSOEVER. I MEAN WE HAVE APPROPRIATIONS WHICH WILL DETERMINE WHAT THE EXPENDITURES ARE WE. AVE A TAX CODE WHICH TELLS US WHAT THE TAXES ARE THE DIFFERENCE BETWEEN THE TWO IS THE CHANGE IN THE DEBT OUTSTANDING AND ANYBODY WHO IS REMOTELY ADROIT IN ARITHMETIC DOESN'T NEED A DEBT CEILING TO TELL YOU WHERE YOU ARE."

GREENSPAN ON DEMOCRATS:

"THEY HAVE TO UNDERSTAND THAT, FOR EXAMPLE, MEDICARE OR ANY OTHER DEFINED BENEFIT PROGRAM CANNOT PERSIST IN THE TYPE OF ECONOMY WE ARE GOING TO BE VIEWING OVER THE NEXT DECADE."

GREENSPAN ON EDUCATION:

"WE DON'T RECOGNIZE HOW SIGNIFICANT OUT EDUCATION SYSTEM PROBLEMS ARE WE ARE GOING TO PHASE OUT OF OUR LABOR FORCE A HIGHLY EDUCATED, VERY SKILLED, HIGHLY PRODUCTIVE PART OF OUR LABOR FORCE AND IT IS GOING TO BE REPLACED ESSENTIALLY BY THOSE KIDS WHO HAVE BEEN SCORING SO POORLY IN INTERNATIONAL EDUCATION COMPARISONS."

GREENSPAN ON THE TREASURY:

"THERE IS A LIMIT ON HOW MUCH THE U.S. TREASURY CAN BORROW WE NEVER CAME CLOSE TO THAT SINCE 1791 THIS IS THE FIRST TIME WE ARE GETTING CLOSE, WE DON'T KNOW HOW CLOSE WE ARE BECAUSE WE CAN'T MEASURE WHAT THE CAPACITY IS."

GREENSPAN ON EUROPE:

"THE MAJOR PROBLEM WE HAVE I THINK IS THE OUTCOME IN EUROPE WHERE AS WE LEARNED LAST YEAR GREECE MAY BE A SMALL COUNTRY, A SMALL ECONOMY BUT IT HAD A MAJOR IMPACT ON THE U.S. AND I THINK THAT THE SAME PROBLEM IS EMERGING I THINK THERE IS A CONSIDERABLE FEAR IN THE MARKET PLACE THAT EUROPE IS GOING TO BE VERY DETRIMENTAL TO GLOBAL PROSPERITY"

GREENSPAN ON THE EUROZONE:

"WITHIN THE EURO ZONE THE BALANCE OF PAYMENTS I PULLING APART NOW THAT CANNOT CONTINUE BECAUSE IT IMPLIES FINANCING FROM THE NORTH OF THE SOUTH AND THAT IS FINE SO LONG AS THE PUBLICS OF THE NORTHERN COUNTRIES DON'T CARE OR ARE WILLING TO DO SO AND I AM AFRAID THAT IS NOT HAPPENING."

GREENSPAN ON THE STIMULUS:

THE STIMULUS PROGRAM IS BASED ON THE PRESUMPTION THAT GROSS STIMULUS WORKS AND STATISTICALLY THE WAY THEY DO THAT IS THEY LINE UP VARIOUS DIFFERENT COHORTS OF SPENDING AND TAX CUTS AND SAY HOW IS THIS GOING TO IMPACT THE ECONOMY BASED ON THE ECONOMETRIC MODELS WHICH DON'T FORECAST VERY WELL

GREENSPAN ON WHERE THE ECONOMY IS GOING:

NO ECONOMIST KNOWS FOR SURE EXACTLY WHERE THE ECONOMY IS GOING AND WE PRETEND BUT IT AINT SO

GREENSPAN ON CONSTRUCTION:

WHAT WE NEED IS A SIGNIFICANT RECOVERY IN CONSTRUCTION TO GET THE UNEMPLOYMENT RATE DOWN AND THAT IS WHAT THE DATA SHOWS AND THE ONLY WAY TO DO THAT IS TO LOWER THE RISK PREMIUMS OVER THE LONGER TERM.

GREENSPAN ON QE:

WE STILL HAVEN'T USED THE EXCESS RESERVES OF QE1 AND QE2 WE WENT THROUGH AND NOW HAVE A TRILLION AND A HALF DOLLARS OF EXCESS RESERVES AS BEST I CAN JUDGE ARE BEING RE-LENT

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