Alan Greenspan, the former Federal Reserve Chief who served under four Presidents including both Bushes, and, whatever you think of him, one of the most influential people of the last 30 years, has come out of the closet. No, not that closet. This one:
Taxes must rise while fiscal stimulus needs to be wound down in order to reduce the U.S. budget deficit and allow private investment to expand, said former Chairman of the Federal Reserve Alan Greenspan on Wednesday.
“I am in favor for the first time in my memory of raising taxes,” Greenspan told an audience at the Council on Foreign Relations in New York.
He warned that the deficit, swollen by massive stimulus spending, was crowding out capital investment. We “must find a way to simmer down fiscal activism and allow the economy to heal,” he said, adding that that stimulus spending had been far less successful than anticipated.
No surprise Greenspan still hates stimulus funding (i.e., Keynesian economics), even a feeble one like the Obama stimulus spending, but tax hikes? Really Alan? The man who knelt down at the demand of the Bush administration to support massive tax cuts that led to massive deficits? That Alan Greenspan? Apparently so:
Greenspan warned of “very grave problems ahead” if the budget deficit, swollen to around $1 trillion by massive amounts of stimulus spending, is not tackled soon.
On a side note don’t you love how the Obama stimulus spending is always referred to by major media outlets as “massive” as if the problem with the “swollen” deficit was created solely by the $787 billion of stimulus funding and not any of the funding we spend on our bloated military and two wars in the Middle East?
As if 8 years of Bushonomics and tax cuts and deficit spending and Republican and conservative policies which led our country and the world to a nearly fatal economic collapse in the Fall of 2008 and Winter of 2009 had nothing whatsoever to do with the Federal Deficit. Funny how that works, isn’t it?
Well, Alan, thanks for all the help on the issue of raising taxes. And be sure to enjoy watching yourself burned in effigy at the next Tea Party rally (assuming any of them know who you are or what you said).
Ps. Here’s what Greenspan really thinks would solve all our economic woes:
“I’m not saying the stimulus is not working, I’m saying it’s working far less than anyone anticipated,” Greenspan said today at the Council on Foreign Relations in New York.
Greenspan said the “most effective” stimulus would be an increase in stock prices rather than more government spending.
See, stimulus spending to save or increase jobs is sort of okay, maybe, but what we really need to do is jack up stock prices. In other words, Greenspan’s solution is to inflate prices of shares sold on the stock market and create another bubble! No wonder everyone in the Wall Street Casino business loves the guy and hangs on his every word.
Yeah, that’ll do the trick: more money for stock brokers, hedge fund managers and investment bankers. Yee-haw!
[Insert joke about old dog, new tricks here]
