Thursday, April 21, 2005

Now Greenspan Is Worried About Deficits

Um, Alan, should you have been more concerned about deficits and the resulting interest rate increases back when you were supporting Bush's tax cuts in 2001, even though he had no plans to significantly reduce spending?

Now, I am not an award winning economist, I have trouble balancing a check book and never did particularly well in math class, but even I can figure out that if you cut taxes and raise spending you will have deficits.

What is about the gospel of tax cutting that makes its believer ignore everything else?

So now Alan says that "the latest projections from the (Bush) administration and the Congressional Budget Office suggest, our budget position is unlikely to improve substantially in the coming years unless major deficit-reducing actions are taken."

As far as I know, there are only two "unless major deficit-reducing actions" that the government can undertake -- massive spending cuts or tax increases. However the Bush Administration and the GOP Congress doesn't believe in either, so we have a bit of a quandary.

UPDATE - Kevin Drum also takes Greenspan to task.