Tags: Greenspan | Tax | Hikes | Curb | Soaring | Deficit

Greenspan Calls for Tax Hikes to Curb Soaring Deficit

Wednesday, 15 Sep 2010 09:49 AM

Former Federal Reserve Chairman Alan Greenspan said deficit spending by the federal government hasn’t been as effective at stimulating the economy as expected.

“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.

“We have to find a way to settle down the extent of activism that is currently going on and allow this economy to heal,” Greenspan said, who said the low level of investment relative to savings signals a lack of confidence in the economy.

Greenspan also said he favors raising taxes to curb the federal budget deficit. In a July interview on Bloomberg Television’s “Conversations with Judy Woodruff,” Greenspan said that tax cuts enacted under President George W. Bush should be allowed to expire at the end of the year.

As Fed chairman in 2001, Greenspan supported the first round of tax cuts under Bush. At the time, the federal government operated with a surplus, and Greenspan told Congress he didn’t think the cuts would lead to a deficit.

Greenspan, 84, was chairman of the central bank and head of the interest-rate setting Federal Open Market Committee from 1987 to 2006. The FOMC meets in Washington on Sept. 21.

Greenspan declined to comment on monetary policy in his remarks today.

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Former Federal Reserve Chairman Alan Greenspan said deficit spending by the federal government hasn t been as effective at stimulating the economy as expected. I m not saying the stimulus is not working, I m saying it s working far less than anyone anticipated, Greenspan...
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Wednesday, 15 Sep 2010 09:49 AM
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