As the financial markets and the two new Presidential campaigns gear up, people often look at former advisers and figure heads like former Fed Chairman Alan Greenspan. Even though I know many people have bashed Greenspan lately for the current housing problems. First, I think that Greenspan is still a very free-market oriented person. Second, I think he did his job like most other people would. As I believe a better policy for the Fed would have been to do nothing. We have come a long way since the founding of the Fed. Enough with that, here is what he has to say about McCain’s tax plan:
“Unless we cut spending, no,” the former Federal Reserve chairman said Friday when asked about 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 does say this:
“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.”
Of course, I agree with Mr. Greenspan because I am not a Keynesian. I am glad he isn’t either. The problem is that who knows if he can pull it off. Even if he cuts the pork, that is only $17 billion dollars. This is nowhere near the $3.3 trillion. I have a hard time thinking that McCain will be able to pull off the spending cut.
But if he does, he will be one of the greatest Presidents ever. I won’t hold my breath.
The rest is here.