Posted on 09/15/2010 5:52:58 PM PDT by Kaslin
Economy: Alan Greenspan gets it wrong on taxes, but he has a point when he says the government can't keep gobbling up the nation's credit. He sees "very grave problems ahead" from the deficit. So do we.
The former Fed chairman has been drawing attention for taking a hard line against the Bush tax cuts. Let them all expire, he says, and he means every last one of them, for the middle class as well as the rich.
Congress isn't jumping to follow his advice, and politics aside, Greenspan's idea should be a non-starter on purely economic grounds. With the private sector struggling to grow and create jobs, a massive new raid on private wealth is the last thing it needs.
But Greenspan's diagnosis is on target even if his prescription is not. As he explained this week at the Council on Foreign Relations in New York, government spending fed by massive federal borrowing is a threat, not a help, to the economy. He said the Democrats' 2009 stimulus bill probably reduced private investment by one-third to a half of the $787 billion in authorized spending.
In other words, far from stimulating the private sector, the bill further depressed it.
"We have to find a way to simmer down the extent of activism that is currently going on and allow this economy to heal," he said, adding, "That is a very minority view in this country." But he may be wrong about that, especially if more people get a clue about the dangers of crowding out.
(Excerpt) Read more at investors.com ...
Why does Greenspan have to explain this? I learned this in college Economics 101 years ago. Or have they stopped teaching this already.
What is he smoking?
The government is spending money on all sorts of things it has no business being involved in.
Economist my a$$.
No matter what amount of revenue they bring in they will
aways manage to spend twice as much.
And when those revenues fall short they will spend four times as much.
They require the GDP to be aways growing at phenomenal rate just to keep up with their spending.
Now what are are the odds of that happening?
None, Nada, Zilch, divide by zero.
Bush was a fool for proposing tax cuts while exercising no restraint whatsoever on spending. However, ending the tax cuts now, with the Demonrats in control, will just give them more of our $ to waste.
During the Dot.com boom in the 1990s, that SOB Greenscam would show up with his plunge protection team on nearly every Friday afternoon when the DOW was down 200 to 400 points, at between 3:07 and 3:18 pm, and dump billions to prop up his thieving fascist buddies.
I lost a bundle and hate that SOB. I want to see Clinton and Greenscam arrested, found guilty of sedition and hang together.
Now in principal the government could invest wisely in improved infrastructure, education, health, etc.. In practice it redistributes resources from those who produced them and makes them available for consumption by those who produce nothing. And choices are not subject to competition in the market place to drive efficiency and the best use of resources.
Greenspan knows all of that. He just seems to have forgotten.
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