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  • Greenspan’s Economics Trips on His Naïve Politics, Again

    Alan Greenspan recently gave a Bloomberg News interview with Judy Woodruff. His agenda was redemption. Hers was politics. She got what she wanted.

    In the course of the interview, Greenspan acknowledged the economy was slowing, a more modest appraisal than that recently signaled by his former colleagues at the Fed who see a significant chance of a downturn and deflation. He also acknowledged that “this is not going to be a full-blown recovery.”

    He noted one reason for the weak recovery is that “an ever-increasing part of the American economy in the last year or so has moved under the aegis of government” and that this “creates an attitude on the part of the business community which is retrenchment, and you can see it everywhere.”

    He was also asked whether letting taxes go up would depress growth, to which he responded, “Yes, it probably will.”

    So, in the face of a faltering recovery that the current Fed thinks could slide into contraction, and acknowledging that it would depress growth further, the old Maestro falls into the trap once again and says we should let the 2001/03 tax cuts lapse.

    His concern, of course, is a reasonable one. Obama and friends have pushed spending to the point where the current and future deficits are at dangerous levels. As Greenspan says, “Unless we start to come to grips with this long-term (deficit) outlook, we are going to have major problems.” He’s right.

    He also notes that “there is a growing fear, political set of pressures to come to grips with the deficit. I think it is going to be far more difficult than anybody imagines.”
    Simply put, he’s making the political judgment that cutting spending is harder than raising taxes. One can agree or not with Greenspan’s economics, but why would anyone listen to him for political judgments?

    In truth, Greenspan is reflecting the classic Washington mantra: Spending cuts hard, tax cuts easy. Fortunately, taxpayers and voters outside the beltway make the final determination. Outside the beltway, the mantra is: Cut Washington, leave my taxes alone. To which we should add: Good–bye, Alan.

    Posted in Economics [slideshow_deploy]

    One Response to Greenspan’s Economics Trips on His Naïve Politics, Again

    1. Andrea, New York says:

      Would you rather keep the Constitution's indirect taxation given us in Article 1 Section 8, or would you rather direct taxation, which wasn't forced on the poeple until Woodrow Wilson's corrupt administration with the 16th amendment, which actually was never properly passed, but actually only really called for tax on rents, interest, and dividends and not the 'labor' or work of any american.

      Now you can let professional management and its campaign contributions buy anti-constitutional trade and think that you're on ground that serves the economy, but since we all in this society are supposed to be shoulder to shoulder (and with the electoral college, every vote counts and thus see the shoulder to shoulder in our society while in europe where people cannot even own property, there isnt shoulder to shoulder – only the fear of what the risk of mob rule will do) but because you got a cadre of poeple thinking they're the new 'royalty' and they can go buy washington and get availed self-dealing trade that violates Article 1 Section 8, and thus also be able to offshore both employement and resources out of the United States, INTO the former colonies of our allies, meanwhile also the reallocation of resources OUT of the US into the former colonies of our allies, call all of those G20, etc. Understand the negative money flow.

      You also have to discern that the generations of economists, which are whores for professional management starting first in Europea and Britain, now something here to which we gave some traction and access to spin the truth, that you can engage in trade that violates our Constitution and there arent some seriously negative consequences to that.

      Although I also wont add we need to shed the european form of banking, which means the Fed and 'central' banking which has enabled the banking cartel to foul with the economy, but at the very least, until NAFTA we didnt have the degree of aggressive nontariff'd trade that we're encountering. Again, you can foul with the economy and erode to a tax payer base abusing the individual taxpayer who now as of 2008 bears the burden of 91% of tax 'revenues' back to the federal goverment from 60% in 1979. Moreover, it is not a spurious correlation to connect the more 'free' trade and corporate tax breaks given by congress to agency, the worse the tax burden has become for the individual.

      So is it worse to have a positive ripple effect with production here and where professional management is prohibited or prevented from being able to send it into a former colony of our European allies, mexico or the PRC? Or better production keep it here, employing americans, and improving our positive wealth effect instead of the reverse and contraction of our industrial base taking more than 15% of our GDP that was in production from 26% production in 1979 to now down to 9% of our GDP in production as of 2008-9.

      Do you feel like things are better overall? It's not just pelosi – it's the power of ? campaign contributors? professional management? the economists like Greenspan who is a fool and a sociopath. many people stupid about "the-Money"

      I suggest you avoid censoring my comment. Unless you really dont want to consider yourselves corporate socialists, if you DO consider yourselves the 'resurgent' republic, understand in our Republic there was no corporate welfare either and they were allowed chartering at the State level, but virtualy nothing gave them them traction at the federal level, in as much as possible especially anything to grow in size and engage in abuse of power that they were generally prohibited from having.

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