WASHINGTON (AP) — Alan Greenspan says the country can't afford tax cuts of the magnitude proposed by Republican presidential contender John McCain — at least not without a corresponding reduction in government spending. "Unless we cut spending, no," the former Federal Reserve chairman said Friday when asked McCain's proposed tax cuts, pegged in some estimates at $3.3 trillion. "I'm not in favor of financing tax cuts with borrowed money," Greenspan said during an interview with Bloomberg Television. "I always have tied tax cuts to spending." McCain has said that he would offset his proposed cuts — including reducing the corporate tax rate and eliminating the Alternative Minimum Tax that has plagued middle-class families — by ending congressional pork-barrel spending, unnecessary government programs and overhauling entitlement programs such as Medicare and Social Security. Democrats pounced on Greenspan's comments, in part because McCain professed last year that he was weaker on economics than foreign affairs and was reading Greenspan's memoir, "The Age of Turbulence," to educate himself. "Obviously he needs to go back to that book and study it some more," Sen. Claire McCaskill, D-Mo., said during a conference call arranged by the campaign of Democratic nominee Barack Obama. McCaskill said eliminating congressional earmark spending — estimated at $17 billion annually — cannot offset McCain's proposed tax cuts. "That's a huge amount of money, but it's not even a drop in the bucket to pay for $3.5 trillion in tax cuts," she said. "So, every time he throws up earmarks and he's asked how he's going to pay for it, he knows he's being disingenuous, he knows he's not being forthcoming." McCain campaign officials dispute the $3.3 billion figure, saying it assumes eliminating 2003 tax cuts made by the Bush administration and then cutting from that higher level. They say McCain is proposing tax cuts worth $600 billion from current levels. "John McCain opposed President Bush's tax cuts in 2003, because they didn't include the necessary spending controls. Sen. McCain's proposed job-growing tax cuts are modest in comparison to his plans to slow the exploding growth of federal expenditures — meaning that contrary to Chairman Greenspan's assertions, this relief isn't proposed on borrowed money," said McCain spokesman Tucker Bounds. While McCain opposed the 2003 cuts and previous Bush administration tax cuts from 2001, he now says he would leave them intact. Obama has said he would repeal Bush tax cuts benefiting families making over $250,000 annually to pay for programs and provide middle-tax class relief. Meanwhile, organizers of a conservative summit in Washington said McCain and his running mate, Alaska Gov. Sarah Palin, missed an opportunity by not addressing the gathering. Some 2,100 activists from 44 states, plus another 10,000 people who signed up to watch online, participated in the three-day Values Voter Summit. On Saturday, McCain was less than 10 miles away, working in at his campaign headquarters in Arlington, Va. Palin was leaving Alaska and traveling to a rally in Reno, Nev. Last year, McCain and seven other GOP presidential candidates spoke at the summit. "I think there is some disappointment that he's not here. I think there's greater disappointment that Palin is not here," said Tony Perkins, president of the Family Research Council, a key sponsor of the summit. "I think people would have liked to have heard from her." Activists attending the summit were unanimous in their enthusiasm for Palin, including several who said their support for McCain was lukewarm before he selected her. Gary Ward, pastor of the Rocky Point Church in Stephenville, Texas, said he supported former Arkansas Gov. Mike Huckabee for the GOP nomination but that his enthusiasm for McCain has been increased by his choice of Palin and his recent statement that he believes life begins at conception. "That was absolutely the right answer," Ward said. Elizabeth Kish, an administrative assistant from Gainsville, Fla., said she was put off by McCain's record on immigration and was considering voting for Libertarian Party candidate Bob Barr until Palin's selection. "Once he chose Palin that was it for me," said Kish, who was wearing a "Pro-Life Pro-Palin" button and another button featuring pictures of Chief Justice John Roberts and Supreme Court Justice Samuel Alito under the slogan, "The Kind of Change I Believe In." Associated Press writer Joan Lowy contributed to this report. -------------------------------- The plan to use a $17 billion reduction in spending to help offset $3.3 trillion in tax cuts reminds me of the plan to use offshore drilling to mitigate gas prices or the idea that a few cents in savings from a gas tax holiday could make a positive difference in people's lives.
I love it how Repubs start an elective war and then want to cut taxes. Our debt has increased to unprecedented levels. No president in US history has ever been responsible for nearly doubling debt ...until W. He is responsible for the largest increase in presedential history. By offering tax cuts and rebates, we're completely screwing our children. Raising taxes is an absolute inevitability ...it's just who's watch will it be on? Apparently McCain wants to shuck responsibility onto somebody else. National Debt: 09/30/2007 9,007,653,372,262.48 09/30/1999 5,656,270,901,615.43 09/30/1991 3,665,303,351,697.03 09/30/1986 2,125,302,616,658.42 09/30/1982 1,142,034,000,000.00 http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt.htm
If Obama has any debate skills, he really needs to take McCain to task for essentially mocking all the economists in the country with his ludicrous proposals and statements (i.e., gas tax holiday, tax cuts increase revenues, etc.). There are things I don't like about some of Obama's plans (for instance, a gas tax hike, while politically difficult, would be much preferable to his "windfall profits tax"), but at least he's never provoked the universal derision of the entire field of economic simultaneously. I don't think even Bush has achieved that.
Hmmm wonder why this thread was not entitled 'Country Cannot Afford Not To Cut Government Spending'? Oh that's right, spending can never be cut, programs can never be axed. We must all pay more more more so whoever has less can have more more more. Yeah that has always worked.
Heck yes cut government spending...starting with the military...and then work your way down..... Cut back on governement........get rid of this boondogle that Bush has created.....cut cut cut...baby ....I am all with you here Nero. DD
Wow greenspan is thinking about the future now? Where was this foresight when he he gave billions of dollars to this financial institution with little to no oversight? 1% interest rate, now how will that ever come back and bite us? At least he is concerned know.
You want to know what happen if you cut more social program and people get more desperate? Do you really want to know? Think Houston post Katrina on a National scale (or maybe now West Houston post IKE.......), stability in a nation doesn't come cheap.
Oh my God you're right? Humanity could never surive and have stability if there are not free handouts! Because, you know, the entire history of humanity has had government welfare programs to keep people from getting 'desperate'.
Some government spending can be productive introducing money into the system. Paying for infrastructure or innovation, increases productivity and investment, even producing a net gain from taxes. The crazy thing to me today is how much money has gone into Iraq. The figure on damages to the Houston area I heard was 8 billion. That's chump change in Iraq money.
that's also chump change in how much money we've given pakistan to fight al-queda....they're keeping the problem alive, so we send them more money. nobody has the balls to call them out except for Obama...while McCain and Bush still think it's Iraq who attacked us.....while al-queada regroups in pakistan.....unreal
I would rather we invest our money in our own country above the rest of the world. Our house needs tending FIRST. DD
Subsidies and tax breaks are also handouts. Instead of begging on the streets, CEOs pay people in fine suits to do the begging for them.
More bad news is going to come according to Greenspan....Air Langhi, you hit it right on, he's left a mess. http://www.thestar.com/Business/article/499135 More U.S. lenders may fail, Greenspan says WASHINGTON (AP) – Without offering a recommendation, former Federal Reserve Chairman Alan Greenspan said Sunday the U. S. government faces tough choices as it tries to help arrange a rescue of Lehman Brothers without using public money. He cautioned that more major U.S. financial institutions may fail in the future, but the government should not protect them all. The weight of the housing and credit crises, he added, "is in the process of outstripping anything I've seen" and has yet to run its course. "It will continue to be a corrosive force until the price of homes in the United States stabilizes," perhaps next year, he said. The immediate challenge for the Bush administration is resolving the fate of Lehman Brothers. Global fears intensified over the weekend that Lehman's collapse would stagger markets and undercut confidence in the U.S. financial system. The field of possible buyers has narrowed; how to finance the rescue was the key issue. Germany's finance minister appealed for a resolution before Asian markets opened Monday, and more discussions involving officials from the Federal Reserve and Treasury Department were expected. "They're trying to do it in a different manner" than the Bear Stearns model, Greenspan noted. The Fed in March agreed to provide a loan of nearly $29 billion as part of JPMorgan Chase & Co.'s takeover of the firm. "The reason is obvious from seeing the effect of the bailout of Bear Stearns. When Bear Stearns was bailed out, it drew a line under that level of firm, implying that anything that was larger than that firm was capable of getting federal assistance,'' Greenspan said. But, he said, "if you generalize that, it is very clear that that is an unsustainable situation in the financial markets." The government cannot set a floor below these firms, Greenspan said. Asked what would happen if the government cannot find a way to reach a deal on Lehman without public money, Greenspan said, "They have to make a very decision as to whether or not they allow it to liquidate or they support it. And those are very difficult decisions.'' He would not make a recommendation about what to do. "I don't know enough of what is going on. I would have to have very detailed information of what's on the Lehman Brothers balance sheet ... and what the repercussions would be with any particular solution," he said.
it's amazing that people will only believe stuff when a hack like greenspan says it. i have been posting over and over again about deficit spending and mandatory spending and no one gives a damn. this is why this country is ****ed. absolutely no kind of ability to plan for things that aren't 5 minutes away from happening.
no kidding...greenspan is a complete joke and attention w**** who can't stay out of the spotlight. he continually promoted these "creative" ways to get people into houses as well as many other creative financial instruments. he had zero foresight and he is a national disgrace. it is completely dumbfounding to me how anyone can continue to respect this man economically after his destructive and shortsighted policies.
dd you do know that military spending as a % of gdp has been in a downtrend for the past 4 decades. it has ticked up by a percent under bush but it still only represents like 4% of spending (i need to find the exact numbers). perotcharts.com check it out
