Alan Greenspan: Extending Bush tax cuts would be disastrous

Posted by AzBlueMeanie:

Better late than never I guess. Alan Greenspan could have stopped this disaster from occurring back in 2001. Now that the economy lies in the wreckage of failed faith based supply-side "trickle down" GOP economics, ol' Alan has suddenly seen the light and found religion. Greenspan Chides Republicans For Pushing To Extend Bush Tax Cuts | Crooks and Liars:

I do believe hell has frozen over. First Alan Greenspan admits his ideological beliefs were wrong, he's now telling the Republicans it would be "disastrous" to extend the Bush tax cuts without paying for them, thus attacking the centerpiece of their dogma (that tax cuts pay for themselves):

Former Fed Chairman Alan Greenspan said that the push by congressional Republicans to extend the Bush tax cuts without offsetting the costs elsewhere could end up being "disastrous" for the economy.

In an interview on NBC's "Meet the Press," Greenspan expressed his disagreement with the conservative argument that tax cuts essentially pay for themselves by generating revenue and productivity among recipients.

"They do not," said Greenspan.

"I'm very much in favor of tax cuts but not with borrowed money and the problem that we have gotten into in recent years is spending programs with borrowed money, tax cuts with borrowed money," he said. "And at the end of the day that proves disastrous. My view is I don't think we can play subtle policy here."

The comments from the former Fed chief were an elaboration of a position he outlined in an interview earlier in the week. Speaking with PBS' Judy Woodruff, Greenspan expressed his opposition to passing legislation that would hold tax rates steady (under law the tax cuts Bush passed ten years ago are going to expire, thereby bringing rates back to Clinton-era levels). President Obama has pledged to continue the tax breaks for those individuals making under $200,000 and those families earning less than $250,000.

But Republicans want the entire package kept in place. Even so, they have declined to say how they would pay for it, saying, in part, that keeping the Bush tax cuts in place will pay for itself.