Former Fed chairman Alan Greenspan was on Sunday's "This Week" and told George Stephanopoulos that the current financial crisis is a "once in a century" eventwhich he wouldn't bet on leading anywhere except to recession. Gloomily, Greenspan explained how US house prices, now in freefall, underlie the US government paper that permeates the world economy - and that consequently the rest of the world is suffering even more than America is from a home-grown US financial collapse.
And, on Saturday the Associated Press reported remarks by Greenspan that clearly indicate he doesn't think John McCain is the one to steer America and the world through that collapse.
"Unless we cut spending, no," the former Federal Reserve chairman said Friday when asked about McCain's proposed tax cuts, pegged in some estimates at $3.3 trillion.
"I'm not in favor of financing tax cuts with borrowed money," Greenspan said during an interview with Bloomberg Television. "I always have tied tax cuts to spending."
That McCain's "Bush-Plus" budget planning, which would make Bush's tax cuts permanent while introducing extra cuts benefiting mostly the very rich and corporations and would aim to offset those cuts by cutting earmark spending, comes up woefully short was pointed out by Democratic Senator Claire McCaskill (D-Mo.):
McCaskill said eliminating congressional earmark spending — estimated at $17 billion annually — cannot offset McCain's proposed tax cuts.
"That's a huge amount of money, but it's not even a drop in the bucket to pay for $3.5 trillion in tax cuts," she said. "So, every time he throws up earmarks and he's asked how he's going to pay for it, he knows he's being disingenuous, he knows he's not being forthcoming."
It'sa position that McCain's own chief economic advisor also holds - as divulged in a forthcoming book. Douglas Holtz-Eakin believes that "you’re going to have to raise taxes whether you’re a Republican, a Democrat or a Martian" but the McCain campaign campaign isn't taking his advice and he isn't speaking out in public about that because "“It’s the brand and you don’t dilute the brand.”
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