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The Maestro Speaks

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Saint Alan Greenspan says that we need to make major cuts to treasured social programs before the bond vigilantes strike and the debt becomes a mushroom cloud:

Allowing taxes to rise would be a small price to pay to get U.S. lawmakers to accept spending cuts on entitlement programs, even if it leads to a “moderate recession,” former Federal Reserve Chairman Alan Greenspan said today during an interview on Bloomberg Television and also at a panel discussion in Washington.

“Even if we have to pay the cost of a significant rise in taxes to get a significant slowing, and then decline, in social benefits that is a very cheap price,” Greenspan said in an interview on Bloomberg Television’s “In the Loop” with Betty Liu. “A large increase in taxes required to fund what is currently in the books is going to cause a recession,” he said. “If we can get away with that as the only cost to this whole problem, I think that’s a pretty good deal.”

[…]

“This is a very dangerous situation,” Greenspan said today at the event. “Markets may respond negatively before we even notice it, and that’s going to cause a huge problem.”

Ooooh! Deficits, how terrifying! Greenspan must have been really opposed to the massive upper-class Bush tax cuts that caused the deficits in the first place, right?

Just as his hedged backing of Mr. Clinton’s plan provided invaluable political cover to Democrats then as they voted to raise taxes, his guarded endorsement of a tax cut today gave new impetus to the effort by Republicans to push through the biggest tax reduction since the Reagan administration.

His comments were especially pleasing to the White House, which has made President Bush’s proposal for a $1.6 trillion tax cut over the next decade the centerpiece of its economic agenda.

[….]

As a result, he said, there is a greater likelihood that the government will run surpluses for years to come — and that the government will soon confront the welcome but tricky question of what to do with surplus revenue when the debt is zero.

Lacking anything else to do with the money, Mr. Greenspan said, the government might eventually end up buying stocks and corporate bonds on Wall Street, involving Washington heavily in private enterprise.

Wait, so the mushroom cloud was excessive surpluses? Why, if I didn’t know better I’d think that for Greenspan shredding the already threadbare American welfare state is the ends not the means, and talking about the deficit is a massive con just like it is for pretty much every other Republican!

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