Pitching for another term as Fed chief?

We read that Alan Greenspan doesn't want the Bush tax cuts repealed. He said, "It would probably be unwise to unwind the long-term tax cut, because it is already built into the system."

Built into the system! Who is he kidding? Clinton's tax rates were "built into the system" for seven years. Why didn't Alan complain in 2001 that Bush's proposed tax cuts were upsetting the then built-in tax schedule?

Because Greenspan shares the smaller-government outlook of the right wing. The Libertarian/Randian view.

Unanswered by Greenspan: What about the "built in" obligations to retirees post-2010?

He also said monetary policy (interest rates controlled by the Fed) can be more responsive to economic conditions, and that fiscal policy (government spending) is not very effective. Which is a way of saying that the government shouldn't try to stimulate the economy - and that no Federal help should be extended to the out-of-work.

As Krugman wrote in early 2001, Greenspan "crossed the line" when he endorsed Bush's tax cut. Back then, the Fed chairman was saying that it was better to tax less and spend less (on things like prescription drugs), which is a political choice, not an economic issue. This guy is the most irresponsible Fed chief in recent memory.

ADDENDUM: In the same story, we read that: Mr. Greenspan also expressed confidence that the United States could shoulder the costs of a war with Iraq, arguing that the economic impact would be significantly less than that of the wars in Korea and Vietnam.

Less than Vietnam. That war is estimated to have cost, at a minimum, $140 billion. Or about $500 billion in today's currency.

But wait! Bush's tax cuts are going to reduce tax receipts by $200 billion / year by 2012. The Fed chief is blithe about the costs of war, yet concerned about a tax rollback.

Alan Greenspan is not making sense.

posted by Quiddity at 11/14/2002 07:13:00 AM