LONDON (Breakingviews) - Alan Greenspan does not to believe the government should take charge of financial decisions.

He is certainly entitled to his belief, but it may not be the right ideology for the Chairman of the Federal Reserve Board, the most powerful government financial decision-maker around. Especially right now, when much higher rates could be the order of the day.

The latest evidence of Greenspan's thinking came in his Wednesday Congressional testimony on the country's "economic outlook and fiscal issues." The only economic issue he discussed was the government's budget deficit, and the only solution he offered was to cut spending. Tax increases would "arguably pose significant risks to economic growth and the revenue base."

But when it came to a plan to reduce government expense, the risks seemed to disappear. Greenspan went out of his way to praise President's Bush idea of privatizing Social Security, the U.S. government pension system. It was a "credible means" of adding to the national savings - never mind the risk of compensating dissaving.

The same keep-the-government-out approach seems to guide Greenspan's calm response to the historically unprecedented U.S. current account deficit. He said in February at a London conference that it was "poised to stabilize." Why? Because market forces would soon start to do their magic, overcoming obstructive government policies.

The bias is hardly new. It started when Greenspan was a young enthusiast for Ayn Rand, a thinker with a passionate hatred for all sorts of government. Greenspan never endorsed her wildest economic ideas, but always stayed in touch. Indeed, Greenspan seems to have drunk deeply at the well of anti-government ideas.

Greenspan's instinctive enthusiasm for market solutions may also help explain his reluctance to raise interest rates aggressively. He was willing to push rates down in the face of a possible recession. But that was an emergency. The challenge now is to restrain the high imports and low savings of the private sector.

Higher rates would -- arguably -- be a way to achieve that goal. But Greenspan seems to think that is not the job of the government, not even of the Fed.

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