Greenspan Says Forget Tax Cuts, Decrease Deficits
By George Anderson
Federal Reserve Chairman Alan Greenspan supports President Bush’s plan to eliminate double taxation on dividends but sees little evidence to support the belief that administration’s proposals will spur economic growth.
Mr. Greenspan is concerned about the impact that growing deficits will have on the economy and said, “All tax cuts should be offset by spending cuts to keep the budget balanced.”
According to The Atlanta Journal-Constitution, Mr. Greenspan “urged lawmakers from both parties to work harder to balance taxes and spending. He advised them to forgo devices such as making tax cuts and spending programs expire in the future — and even the legislative ceiling on the national debt — saying they were so easily circumvented as to be useless.”
Moderator’s Comment: How much did Alan Greenspan’s
testimony before Congress hurt the administration’s chances for passing its
economic legislative agenda? Should retail and consumer goods industry groups
reevaluate their support for the Bush administration’s proposals?
Retail industry groups have been overwhelmingly supportive
of the President’s proposals. It gives one pause, however, when the Fed chairman,
who has much more in common with Milton Friedman than John Maynard Keynes, breaks
ranks with the administration over economic policy. [George
Anderson – Moderator]