What do the following words have in common: paused … quickened … slowed down … outpaced? All were neatly contained in Federal Reserve Chairman Alan Greenspan’s most recent testimony before the Joint Economic Committee concerning the U.S. economy.

Everybody knows by now that “Greenspanisms” are often ambiguous and antonymous in nature, leaving most people scratching their heads while Congress tries to put a political spin on them; nonetheless, people are listening.

Faced with terrorist attacks, stock market booms and busts, and a partisan Congress that cannot seem to get its collective act together on a sound fiscal policy, Greenspan has done remarkably well. His current term expires in January 2006, and while the president needs to find another Greenspan there is no reason to rush the process prematurely.

The Fed’s accommodative monetary policy has worked well. Over the last 15 years, the inflation rate averaged slightly less than 3 percent, remarkably low considering that the average inflation rate over the previous 15 years was more than 6 percent.

Furthermore, the average unemployment rate from 1987 to 2004 was 5.58 percent, compared to 6.74 percent the previous 18 years. From 1987 to 2004, annual GDP growth averaged a healthy 3.10 percent on average, with only six quarters of zero or negative growth.

In fact, Greenspan presided over the longest economic expansion in history, characterized by a remarkable acceleration in labor productivity in the non-financial corporate sector of about 3.5 percent since 1995 – double the average pace of the preceding quarter-century.

Furthermore, Greenspan recognizes the importance of stimulating economic growth through access to capital for small businesses and two important tax reforms – broadening the tax base and lowering tax rates.

In a March 3 speech before the President’s Advisory Panel on Federal Tax Reform, Greenspan noted, “High tax rates (whether the base is income or consumption) exacerbate the distortions that taxes invariably create.”

Unfortunately, said Greenspan, the tax code has become “overly complicated,” “burdened by higher marginal rates” and includes “special provisions that have undesirably narrowed the tax base.”

Additionally, Greenspan supports enhanced incentives to save for – as well as delay – retirement as the declining working age population makes it increasingly difficult to fund health and pension benefits. Although he cautions a go-slow approach to Social Security privatization, he warns that the current system will create undue burdens on future workers.

Of course Greenspan, or whoever replaces him, faces several challenges, low savings rates, and a large trade deficit. It is important to note, however, that besides tinkering with interest rates the Fed has no control over fiscal policies that reward borrowers and punish savers.

Those worried about who the next Fed chairman will be should instead focus their efforts on getting Congress to agree on meaningful fiscal policy that lets the economy grow, such as a simplified and fair tax code and the repeal of arduous rules that cripple economic growth.

That’s what Greenspan advocates, and the president should make sure the next Fed chairman supports it as well.