Alan Greenspan: 'I Stand With Allowing The Bush Tax Cuts To Expire'

Alan Greenspan, former Federal Reserve chairman and registered Republican, says it's time to let go of large-scale tax cuts for the wealthy.

“If we do not get Simpson Bowles as a fallback,” Greenspan told CNBC, referring to a large-scale deficit reduction program proposed by the co-chairs of President Barack Obama’s fiscal commission, “I stand with allowing the Bush tax cuts to expire. You could do it gradually, whatever. But if we think we have this luxury of waiting for a couple of years with a little stimulus now and then later tightening up. I hope the bond markets are listening.”

Greenspan’s comments come as lawmakers are wrangling over the best way to reduce the nation’s budget deficit. President Barack Obama proposed raising taxes on millionaires as part of a plan of spending cuts and tax increases to reduce the budget deficit. Republican leaders responded by accusing Obama of promoting class warfare.

In addition to the budget deficit, Greenspan said debt crisis unfolding in Europe is also informing the U.S. economy.

“What’s driving the United States at the moment to a very large extent is Europe,” Greenspan told CNBC. “You can’t understand the United States at all, I think, unless you know what’s going on in Europe.”

French and German leaders were split Friday on how best to shore up European banks and prepare for a potential Greek default, according to Reuters. German Chancellor Angela Merkel and French President Nicolas Sarkozy are trying to come to an agreement ahead of a summit Sunday, under U.S. and market pressure over concern that failing to resolve the crisis will hinder a global economic recovery.

Still, even if the Euro zone crisis wasn’t exerting pressure on the recovery, the U.S. economy would still be growing at a slow pace, Greenspan said in the interview. The Labor Department’s announcement that the U.S. barely added enough jobs in September to keep up with population growth renewed concerns about the potential for a strong recovery.

“If we could somehow extract the goings on in Europe, I think we could see what we are seeing,” Greenspan told CNBC. “Namely, a sluggish economy but one that is continuously edging higher.”

Comments

[dpgaff]

05:30 PM on 10/15/2011

The bush era tax cuts apply to retirement funds invested in the market. If the rich sell off their investments all at once, the stock market will fall. It's half past a protest...do you know where your retirement money is?

[nanjemoy]

12:52 AM on 10/12/2011

let them end, with all haste.

[nanjemoy]

12:51 AM on 10/12/2011

I'm for ending the Reagan tax cuts. (though, to be fair, that was also the Rostinkowski tax cuts - didn't he end up in jail?)

[Jeff Parfitt]

02:05 PM on 10/11/2011

The Bush Tax Cuts have done more to increase our debt than anything else except the wars. If we allowed them to expire, as they were designed to do, then we would have a lot more room for negotiation on our budget. But the answer to our financial issues is not just raising taxes or just cutting spending. It has to be collaborative. Dems have been trying and the GOP has been denying this tactic for years. Revenue is important, and taxes are what we pay as a thank-you for all the freedoms and protections guaranteed by our government, it's amendments, and its regulations.

[uneeda]

12:28 PM on 10/11/2011

call a doctor for this guy

[MuchMadness]

12:27 AM on 10/11/2011

The Tea Party should read Romans 13:6-7.
The Bible commands them to honor and respect President Obama and to humbly and happily pay taxes.

[MuchMadness]

12:23 AM on 10/11/2011

When federal taxes are cut, states and cities often just wind up raising taxes.
People should stop wanting tax cuts. Tax cuts are a childish way for politicians to govern.

[MuchMadness]

12:20 AM on 10/11/2011

The so-called Bush tax cuts are really Obama-Pelosi-Reid-McConnell-Boehner tax cuts because Democrats went along with Republicans in extending the cuts. In fact, Democrats have been tax cutters par excellence. President Obama has supported many tax cuts and has gotten Congress to go along with enacting the tax cuts.

[rockyroad]

11:53 PM on 10/10/2011

Those TARP billions being passed down for generations are dollars that could have been spent to save your home and your job . . . but were instead spent to bail out Wall Street.

When your kids can't get into the best colleges in America, that will be your tax dollars at work;

When you are suffering from Alzheimer's in your old age and have no pension fund, that will be your tax dollars at work;

It's obscene.

[rockyroad]

11:48 PM on 10/10/2011

I'm tending to think that these are trolls whose paid mission is to divide us.

Issue is simple: Has Wall Street benefitted while America has fallen? Has America paid for Wall Street to recover at tax payer expense? Does Wall Street get an unfair deal (how many of you have zero percent student loans/ home loans? any loans?)

Do you recognize that if the trillions had been spent on Main Street, every home in America would not be in foreclosure? (Granted, a boatload of people who got homes that they could not afford would have been bailed out . . . but honestly, think about it, all of those cheaters could have been bailed out and subsequently prosecuted, as opposed to bailing out a few on Wall Street, who lied, cheated and stole, and who will never be prosecuted, but who will be passing down those billions to their children and their children's children for generations, while you are kicked out of your house . . . think about it . . . keep your home and thieves skate with a little, vs. thieves skate with billions and you are homeless and out of work?)

OCCUPY WALL STREET

[rockyroad]

11:40 PM on 10/10/2011

saltheplumber needs to feel the prongs of that same pitch fork.

Not sure whose side he/she thinks he/she is on. I can assure you, not on mine.

[softcement]

11:36 PM on 10/10/2011

Maestro needs to sit on a pitch fork.

[rockyroad]

11:17 PM on 10/10/2011

Oops, meant the 99% of Wall Street brokers, hedge funders and revolving door, former White House executives. Heck, you could take the top 75% of wage earners and compare them to the same people in the 99%, not even including the unemployed, and the disparity would blow the mind. . . . It certainly blows the idea of America . . . freedom and equality for all.

[rockyroad]

11:12 PM on 10/10/2011

Word to all of the Congresspeople who are for sale for a 180-proof cash infusion, prostitution is against the law in most states and frowned upon in all. Prohibition came about in many ways because wives were angry that their husbands were spending the money on swill, came home with no change in their pockets, beat their wives and children and lost the job and the house.

Think of the wives and children as your constituents and the house as their homestead and your seat in Congress. The idea that the breadwinners have lost their jobs as a consequence of your drunken consequence speaks for itself . . . millions of Americans out of their homes since 2008 . . . and you sots saw fit to bail out Wall Street . . . who exactly is responsible for irresponsible mortgage debt obligations? It isn't the formerly employed parent making regular mortgage payments.

You want to get into a street fight . . . blame unemployment on the unemployed, and home foreclosures on the vast majority of Americans who were paying their mortgages, as they have for decades.

Lets see . . . let's compare the number of consistently credit-worthy homeowners who have lost their homes . . . their wages . . . with the annual earnings of the top 99% of people on Wall Street.

[TBrennan]

11:07 PM on 10/10/2011

Thanks for the 10 year late stand Alan. Now go stand outside because we stopped listening to you years ago.

[rockyroad]

11:28 PM on 10/10/2011

TBrennan,

Appreciate your thoughts and I completely understand your thought process; however, Greenspan, like all of us hopefully, is capable of learning from his mistakes.

Seems like a mea culpa so me.

Staring into the eyes of catastrophe, I'm glad that those who orchestrated the catastrophe has the courage to come out and say, "I was wrong. Wake up."