Greenspan: Repeal Bush Tax Cuts

Here's something unexpected: Former Federal Reserve Chair and self-proclaimed Republican libertarian Alan Greenspan, on the heels of calling for strict federal regulation of the financial sector, has come out against the Bush-era tax cuts—the very tax cuts that he supported years ago. In this hotly contested economic policy debate, Greenspan is veering to the left of of the White House and President Obama himself, urging a complete repeal of all the '01 and '03 tax cuts, despite warnings from both Democrats and Republicans that drastic cuts threaten the fragile economic recovery. Greenspan fears that if the U.S. doesn't boost federal revenue to offset rising health-care costs, bond investors could spike borrowing costs and cause the global economy to take another nosedive. “I’m in favor of tax cuts, but not with borrowed money,” he said. “The problem we now face is the most extraordinary financial crisis that I have ever seen or read about.” However, Greenspan's clarion call has not been met with enthusiasm, even among liberal economists. Dean Baker, co-director of the left-leaning Center for Economic and Policy Research, said, “His concern about the current deficit seems to ignore the state of the economy... It is hard not to believe that politics is playing some role in his positions.”