Tags: alan | Greenspan | Repeal | Bush | Tax | Cuts

Greenspan Again Calls for Repeal of All Bush Tax Cuts

Monday, 09 Aug 2010 11:22 AM

Former Federal Reserve Chairman Alan Greenspan, the architect behind the Republican administration's cuts, is now calling for their complete repeal, thereby putting himself to the left of President Barack Obama.

“I’m in favor of tax cuts, but not with borrowed money,” Greenspan told The New York Times. “Our choices right now are not between good and better; they’re between bad and worse.”

“The problem we now face is the most extraordinary financial crisis that I have ever seen or read about.”

Greenspan fears that, without drastic action to increase federal revenue and reduce the long-term growth in healthcare costs, bond investors could make a run on Treasury securities, driving up the nation’s borrowing costs and leading to another global economic crisis.

Greenspan is only partly wrong, says economist and former Secretary of Labor Robert Reich.

“The Bush tax cuts should expire for the top 2 percent of filers (those earning over $250,000) because they save rather than spend a large portion of their incomes, and we need all the spending we can get,” Reich writes in his blog.

“The cuts should be extended for everyone else because they’ll spend them.”

The top 2 percent now, Reich observes, receive almost a quarter of total national income, which is one reason why the middle class doesn’t have the purchasing power to lift the economy on its own.

“The best way to give them even more purchasing power would be to give the middle class a larger tax cut — say, a payroll tax holiday on the first $20,000 of income,” he says.

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Former Federal Reserve Chairman Alan Greenspan, the architect behind the Republican administration's cuts, is now calling for their complete repeal, thereby putting himself to the left of President Barack Obama. I m in favor of tax cuts, but not with borrowed money, ...
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2010-22-09
Monday, 09 Aug 2010 11:22 AM
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