Alan Greenspan: U.S. Must 'Let Bush Tax Cuts Lapse' (VIDEO)

With the risk of a national debt crisis lurking over the nation, former Federal Reserve chairman Alan Greenspan can't agree with continuing vast tax cuts for America's richest taxpayers.

Appearing on MSNBC's Meet The Press on Sunday, Greenspan was trenchant, saying that Bush-era tax cuts, extended last year by the Obama administration, must be allowed to expire with the federal deficit, once tomorrow's problem, quickly developing into a threat to today's economy.

"I think this crisis is so imminent and so difficult that I think we have to allow the so-called Bush tax cuts all to expire," Greenspan said. "That is a very big number," he continued, adding that taxes should return to the higher levels instituted by the Clinton administration in the 1990s not just for the wealthiest taxpayers, but for all Americans.

Last November, the Obama administration accepted an across-the-board, temporary continuation of steep Bush-era tax cuts, including those for the wealthiest taxpayers, largely to protect middle-class tax payers also included in the legislation. The estimated cost of just the portion of the tax cuts that would apply to the richest Americans is $42 billion this fiscal year, more than the $38 billion value of the savings from the federal budget cuts lawmakers approved last week.

On Wednesday, in an attempt to address the nation's mounting federal debt crisis, President Barack Obama outlined a 12-year, $4 trillion deficit-reduction plan. As the U.S. approaches the $14.3 trillion debt ceiling, which the Treasury Department estimates will be hit by May 16, Treasury Secretary Timothy Geithner said he expects Congress to increase the debt limit, allowing the country to borrow more money.

During the same broadcast on Sunday, Geithner reiterated his confidence that certain congressional lawmakers would come together to raise the nation's debt limit, labeling it "absolutely essential to [preserving] the creditworthiness of the United States of America" and warning of dire consequences if politicians couldn't get the deal done.

"If you allow people to start to doubt whether the United States of America will meet its obligations, that would be catastrophic," Geithner continued. "[W]e can't take that risk."

Watch Alan Greenspan's entire MSNBC interview here:

Visit msnbc.com for breaking news, world news, and news about the economy

Comments

[Lolasmom]

09:30 AM on 05/01/2011

Greenspan is talking? We would not be here if not for his tenure.
Hw should be ashamed of himself.

[jerzeyjim2]

11:19 PM on 04/27/2011

George W. Bush has been appointed to the Federal Reserve Board. This is because Bush was an expert in "juggling the national books" from the year 2000 to 2008 so as to dupe everyone into believing that "deficits don't matter, people do."

[FreeTexan]

08:35 PM on 04/19/2011

Yea, because the "American Public" should let "Federal" Economic Policy should be dictated by the guy who created the dot.com bubble and the housing bubble. If anyone thought this guy had an ounce of credibility prior to these baffling statements, they should lose any such thoughts now. Less savings, meaning less long term consumption and investment, is not good for any economy, especially in a recession.

[it is me]

04:09 PM on 04/19/2011

Regardless of taxes, why is defense spending NEVER one of the options for budget cuts?

[jbw1948]

03:09 AM on 04/22/2011

We need to put the federal income tax back to where it was in the 1920's and we would not have to cur defense spending!!!

[Spock]

08:14 AM on 04/19/2011

Greenspan keeps flip-flopping on this issue. I think common sense sometimes bursts through his Randian delusions. But only just barely.

[Jack Mahoney]

08:08 AM on 04/19/2011

In the 24-hour news cycle, it's convenient for Greenspan to admit now rather than a year from now that the tax cuts were a mistake. Let's see whether he makes the same statements when the Congress votes in 2012 on whether to extend them again. When your country's military can't seem to do without every new toy, when its budget has nearly doubled in a decade, and when it can't resist "stepping in" to this or that civil war, you really do have a spending problem. However, in the short term, while you're considering going to rehab for the spending problem, you might want to raise revenue so your bonds don't go belly up. May we quote you, Mr. Greenspan?

[Ron Booth]

11:48 PM on 04/18/2011

Bush was wrong to institute these tax breaks to begin with considering we were involved in not one but two wars that he never provided funding for and the GOP should be held responsible for holding the extension of unemployment benefits hostage to get the tax breaks extended and the Obama administration and the Dems should have called the GOP out on their shameless shenanigans rather than paying the ransom.

There should be immediate legislation to terminate the Bush error tax cuts at the end of 2011 PERIOD!

[EdCorner]

10:52 PM on 04/18/2011

Does this make any sense to anyone? Geithner saying we have to raise the debt ceiling to prove the creditworthiness of the US? Sounds like double speak. How can hitting the ATM some more, a lot more! increase our creditworthiness? In reality it can't, but I'd suppose Geithner has a plan to make it look to everyone like it does.

[Spock]

08:10 AM on 04/19/2011

When Bush was president the debt ceiling was raised seven times. Teabaggers never said a thing about it.

[EdCorner]

12:27 PM on 04/19/2011

We weren't in debt like we are now. Can you anti-teabaggers forget shrub and just think about today? You act like bringing up shrub justifies anything and everything today when today is much different. Live in the present

[EdCorner]

08:30 PM on 04/19/2011

I had to reply this way. This is exactly what I'm talking about. The comment you originally replied to was about Geithner and - you turned it into a Bush fight and Obama rally. This is about Geithner. Why bring up Bush ?

[jbw1948]

03:14 AM on 04/22/2011

Thats right if we dont raise it and default on payments our creditworthiness will take a big hit!
We need to keep borrowing money to pay for the Bush administrations mistakes instead of taxing the people to pay for them!!!

[EdCorner]

11:18 AM on 04/22/2011

No. Defense has to be on the table

[ejfrommberg]

09:35 PM on 04/18/2011

How bizarre….

I wonder how many wall street plutocrats who funded the tea party realize they are now passengers with a crazed congressmen on the bridge to nowhere. In a nice new Caddy…

The gas pedal is stuck at full throttle and the edge of the bridge is appearing quickly…

The brakes are not working. Darn it a plutocrat says (not actual words - translated by a theocrat). But to himself he thinks that deregulation gig may not have been a good idea….

Who is this nameless plutocrat calling for the tea party driver to slow down, pull the emergency brake, and steer into the median?

And what happens if the that congressman driver refuses to slow down?

Well, then, the plutocrat has no choice. Just roll down the windows, and enjoy the huge, fast, and last air.

And deal with his conscience on your way down….

[Damien Lavizzo]

11:27 AM on 04/19/2011

Sorry, I couldn't hear you over all the rhetoric....

[ejfrommberg]

07:44 PM on 05/05/2011

Sorry eh? You are right. A little heavy on the metaphors too.

[PhDcommonsense]

09:10 PM on 04/18/2011

An Intelligent Republican who has finally come to his senses. OH WELL TOO LATE. The Republicans have already overran the House on these Lies and Distortions.

Let's hope the Electorate has had enough!

[jbw1948]

03:15 AM on 04/22/2011

They will go down in flames in 2014

[Kimpeach]

06:44 PM on 04/18/2011

Glad that Greenspan is telling the truth on this issue, but the damage he caused in the 80s-90s will never be replaced and never forgiven.

[MrUniteUs]

05:20 PM on 04/18/2011

Good to see Greenspan finally came aboard on this issue.
Even Reagan's Budget director, David Stockman said we to let the Bush tax cuts expire.
It's true the Bush tax cuts add over a billion dollars a day to the national debt.

[Jennifer Mead]

04:28 PM on 04/18/2011

Greenspan is saying this? Sure hope the Pres. gets a clue. Before you post that he said he wouldn't extend them again, please look at his campaign promises and tell me why he did it in the first place. I don't want to hear the oh the poor people at Xmas etc etc.

[Ron Booth]

12:01 AM on 04/19/2011

If you recall the GOP was holding the extension of unemployment benefits hostage.

Personally I wish the prez and the Dems had drawn a line in the sand against the Repugs but the unfortunate reality is that taking such a stand would have left millions of Americans who got totally screwed by Bush without the ability to keep their lights on, food on the table and gas in their cars to search for work.

Principles are wonderful things but sometimes the unfortunate reality is that standing on our principles means someone else ends up unjustifiably on the short end of the stick.

[Thadd007]

02:50 PM on 04/18/2011

Nice work Republicans.

Just a few years ago your leaders sent the financial system into a near complete collapse.
Now Wall Street is laughing at your stupid "increase revenue by decreasing revenue" scheme, and worried that there is no political will to seriously deal with the deficit.
Imagine that.

I ask all the readers of this blog, to take a stand with me, and vote out & recall as many Republicans as possible during the 2012 elections.

http://seekingadventurequest.blogspot.com/
http://www.youtube.com/watch?v=ZixCUSzKBJA

[ReadMyLipstick1]

02:43 PM on 04/18/2011

Mr. Greenspan is correct IMO. Bush's tax cuts to the higher income folks accomplished nothing. And they so professed that it would. The repubs. have this "trickle down" theory and for years have insited that it will work, when all it does is put the middle class down to a lower level of what they earn and what their earnings will buy. No one faults those folks who earn a lot of money, but the fault lies wherein they simply do not pay their fair share of taxes even semi-equivalent to their incomes. I for one am awfully tired of carrying them around on my dollar!

[Jennifer Mead]

04:29 PM on 04/18/2011

I agree. I think that taxes are the tip of the iceberg. We need to close the loopholes and use that money to re-build American infrastructure which by itself creates a lot of jobs.