Greenspan Should Have Stood Up More Loudly

Even a recent graduate with his simple BA in Economics could understand that the Bush Administrations policy of cutting taxes to the very rich would not help the economy. I think that is why the world was shocked when Greenspan seemingly endorsed the disastrous proposals of the Bush Administration. No civilization in history of the known world HAS EVER CUT TAXES DURING A WAR. I think the only thing surprising from Greenspan’s book is that he was surprised Bush would be a disaster… because he is so successful with everything else he has done. Wrath of the Maestro In his new memoir, The Age of Turbulence, former Federal Reserve chairman Alan Greenspan takes the Bush administration and the 109th Congress to task for their stewardship of the American economy and the federal budget. When the Bush administration first took office, Greenspan, a self-described "libertarian Republican ," said he "thought we had a golden opportunity to advance the ideals of effective, fiscally conservative government and free markets." But the former Federal Reserve chief was soon disappointed to find out that under the new President, "little value was placed on rigorous economic policy debate or the weighing of long-term consequences." In his book, Greenspan "paints a picture of [President] Bush as a man driven more by ideology and the desire to fulfill campaign promises made in 2000, incurious about the effects of his economic policy." "Most troubling to me was the readiness of both Congress and the administration to abandon fiscal discipline ," writes Greenspan. "They swapped principle for power ." 'DEFICITS MUST MATTER': When Bush entered office, he inherited a $128 billion federal surplus that was projected to grow even larger . In congressional testimony, Greenspan supported Bush's 2001 tax cuts, though not necessarily their size. But the tax cuts proved negative because they were "unmatched by decreased spending, and, in the wake of September 11, still more open-handed spending ." By 2004, Bush had managed to create a record deficit of $413 billion in fiscal year 2004 . Contrasting Bush's deficit-laden record with President Clinton's surplus, Greenspan criticizes Cheney's contention that "deficits don't matter," arguing that belief "became part of the Republicans' rhetoric." "Deficits must matter ," Greenspan asserts, because "uncontrolled government spending and borrowing can produce high inflation 'and economic devastation.'" The increased federal debt endangers America's economic independence while also increasing the trade deficit. Bush's "policies continued in place irrespective of what was happening to the surplus," Greenspan told CBS recently. "I don't know if it was rigid," he said. But "it was wrong ." …While "CBO's projections confirm that the deficit for the current year will be smaller than had been anticipated earlier this year," they "offer no support for the claim that the President's tax cuts are boosting the economy and significantly improving the budget outlook for coming years." Not only did "the cumulative budget deficit from 2008 to 2012 increase...sharply from $194 billion to $696 billion in the CBO’s projections," but the Joint Committee on Taxation estimates that in 2007 "the federal government would...have shown a surplus had it not been for President Bush's tax cuts." We could be fiscally sound and pay for all the needs this country faces… we can’t because of Bush’s stupid tax cuts for the rich… its as simple as that. RSS Feed