Greenspan Says

[dairygirl4u2c]

earmarks are like 17 billion a year. hardly going to make a dent in getting that large 3.3 trillion tax cut mccain wants.
does mccain want to be the next president,,,, following bush jr, and reagan, to send the national debt sky rocketing?
you guys do realize, that the interest on the debt is like 20 percent or soemthing of the budget. that means, if you pay 10000 a year in taxes, you're pay 2000 per year for interest on debt, for nothing essentially. much of it is merely deflating our economy and lining the pockets of the chinese, the lenders.
if you want a real tax cut, get rid of all this borrowing, stand up against those who push ideas like what mccain is doing.

[quote]Greenspan Says McCain Tax Cuts Need Budget Reductions (Update1)

By Scott Lanman

Sept. 13 (Bloomberg) -- Former Federal Reserve Chairman [b]Alan Greenspan said the U.S. can't afford $3.3 trillion of tax cuts proposed by Republican presidential nominee John McCain[/b] without similar reductions in the federal budget.

[b]Greenspan, a lifelong Republican and longtime friend of McCain, said [....] ``I'm not in favor of financing tax cuts with borrowed money.''[/b]

[b]McCain has said he would balance the cost of most of his tax cuts with budget reductions, while providing few details beyond eliminating earmarks and other pork-barrel spending[/b], which have totaled about $171 billion since 2001. Democratic nominee Barack Obama is proposing fewer tax cuts and more ambitious spending programs.

Greenspan also said the loss of investor confidence in Lehman Brothers Holdings Inc. would best be resolved by Wall Street firms acting without federal financial aid. ``If that can be done, that's the ideal solution,'' he said when asked if regulators should pressure private financial institutions to work out the problems at Lehman.

Bank of America Corp. led a list of potential bidders for Lehman, a person with knowledge of the talks said yesterday, even as the U.S. Treasury opposed funding a deal and the structure of any transaction remained in flux.

Greenspan said he has ``mixed feelings'' about a second government economic-stimulus bill after the U.S. provided a $168 billion package in February. While such an action may increase the budget deficit at a time when spending on retirees' medical benefits is about to cause ``big'' financial problems, it may also boost economic growth, he said.

Even Odds

Greenspan has said there's at least a 50 percent chance the U.S. economy will slide into a recession.

[b]``There is no infinite piggy bank here,'' Greenspan said in the interview. It's ``far more important'' to use federal resources, if necessary, to shore up the financial system and end the credit crisis, as Treasury Secretary Henry Paulson did in taking over mortgage-finance companies Fannie Mae and Freddie Mac, averting a possible run on the system, Greenspan said.[/b]
[ie, free markets fail, a lot]

House Speaker Nancy Pelosi and other Democrats in Congress have called for an additional $50 billion in economic stimulus. A request by General Motors Corp., Ford Motor Co. and their suppliers for at least $25 billion in government loans to help them shift to more fuel-efficient auto models will likely be included, Democrats said this week.

`Critical Need'

Greenspan's memoir, ``The Age of Turbulence,'' was released in a paperback version this week, a year after the first hardcover edition. In a new epilogue, [b]the former Fed chief, who retired in 2006, cited a ``critical need'' to create procedures for bank bailouts that ensure there is no impact on the Fed's balance sheet and interest-rate policy.[/b]
[contrary to chuck norris and other naive conservatives who think the government doing anything can only be bad, even here]

In the interview, Greenspan, 82, said the ``most critical question'' is where to draw the line between companies that get government-led bailouts. It's impossible to rule out such actions completely, Greenspan said, citing crises such as the current one as a ``once-in-a-half century, once-in-a-century event'' that can't be avoided.

``If you want the system to stay together, there comes a time when you basically have to substitute sovereign credit for private credit to keep the system moving,'' Greenspan said. If a bailout is necessary, it's important that ``you do it in a way which essentially does not have major long-term consequences.''

Pork-Barrel Spending

McCain's proposal, outlined April 15, would extend President George W. Bush's tax cuts, reduce the top corporate rate, repeal the alternative minimum tax and double exemptions for dependents. That would be offset by eliminating pork-barrel spending, freezing a portion of the budget and saving from Medicare spending, McCain said at the time.

``I always have tied tax cuts to spending,'' Greenspan said. In 2001 testimony before Congress, Greenspan was widely interpreted to have endorsed Bush's proposal to cut taxes by $1.6 trillion over 10 years. In the book, Greenspan characterized his testimony as politically careless and said his words were misinterpreted.

Today, Obama's campaign held a conference call with reporters to highlight Greenspan's comments.

[b]``Alan Greenspan, even though he's a Republican and even though he's a friend of John McCain's, spoke some truth yesterday,'' Senator Claire McCaskill, a Democrat from Missouri, told reporters. ``John McCain is being irresponsible.''[/b]

[b]She called on McCain to further detail how he plans to pay for the cuts.[/b]

Paul Volcker

Paul Volcker, Greenspan's predecessor as Fed chairman, has endorsed Obama, a first-term U.S. senator from Illinois, in the presidential election, and is serving as an economic adviser to the candidate.

Greenspan said the widening income disparity among Americans is a ``very serious'' issue that requires both raising the pay of lower- income workers and reducing higher incomes.

``The best way of doing that is to remove what is essentially protectionism for those skilled workers in the United States who are helped by keeping out their competition,'' he said, referring to the issue of ``skilled immigration.''

The U.S. education system is ``critical'' to help ``cutting-edge technologies'' replace older industries that will be phased out over time, Greenspan said.[/quote]

[peach_cube]

Of course if he can actually cut the pork barrel spending, then the tax cuts are possible...

[dairygirl4u2c]

actually, the article says otherwise:

[quote]McCain has said he would balance the cost of most of his tax cuts with budget reductions, while providing few details beyond eliminating earmarks and other pork-barrel spending, which have totaled about $171 billion since 2001.[/quote]

that's over an 8 year period or so, and that's at most 5% of his tax cut plan. ish.

neocons are notorious for wanting to borrow and spend.
mccain is quite the neocon, though i don't know what his position is economically in various situations as he's not to upfront about it. he's not being forthcoming.

i think what he's doing, is trying to pander to the people, hitting passionate buttons that everyone can understand ie, pork barreling and earmarks are bad. even democrats probably can concede as much when they're unjustified. and then people will think "eliminate pork barrel and earmarks,,,,, get all the tax cut he wants" even though the details show otherwise.

what he's not doing is saying either 1. i want to go into debt 2. i want to cut X, Y to finance my tax cuts

Edited September 13, 2008 by dairygirl4u2c

[Aloysius]

yeah no, he's gotta cut much more than pork barrel spending. he's gotta cut government programs, and he's definitely not prepared to do that no matter how much he claims to be a "maverick"

[T-Bone _]

[i]you guys do realize, that the interest on the debt is like 20 percent or soemthing of the budget. that means, if you pay 10000 a year in taxes, you're pay 2000 per year for interest on debt, for nothing essentially. much of it is merely deflating our economy and lining the pockets of the chinese, the lenders.[/i]


Ah, yes, the dreaded national debt...owed to American Citizens, mostly. It is not deflating our economy, and is not lining the pockets of anyone but the purchasers of bonds.

[CatherineM]

Any realistic tax cuts went out the window when we went into Iraq. I remember how excited I was when the budget was actually balanced for about 10 seconds 10 years or so ago.

The equivalent for a regular person would be to tell your boss that it is okay to cut your wages eventhough you live pay check to pay check, and are in debt up to your eyeballs.

[dairygirl4u2c]

[quote name='T-Bone _' post='1654941' date='Sep 13 2008, 08:05 PM'][i]you guys do realize, that the interest on the debt is like 20 percent or soemthing of the budget. that means, if you pay 10000 a year in taxes, you're pay 2000 per year for interest on debt, for nothing essentially. much of it is merely deflating our economy and lining the pockets of the chinese, the lenders.[/i]


Ah, yes, the dreaded national debt...owed to American Citizens, mostly. It is not deflating our economy, and is not lining the pockets of anyone but the purchasers of bonds.[/quote]

this is what i thought: half of it's owned by foreignors. even if someone said that debt is good cause it somehow stimulated the economy, which i dont agree with,,,, and neither does greenspan.... it's surely not good when you're making the payments to foreignors.
[quote]Foreign ownership

A traditional defense of the national debt is that Americans "owe the debt to ourselves", but that is increasingly not true. The US debt in the hands of foreign governments is 25% of the total[32], virtually double the 1988 figure of 13%.[33] Despite the declining willingness of foreign investors to continue investing in US-dollar–denominated instruments as the US Dollar has fallen in 2007,[34] the U.S. Treasury statistics indicate that, at the end of 2006, foreigners held 44% of federal debt[/quote]

it doesn't matter who it goes to. even if it stays here, it's essentially roundabout way,,, everyone paying a fifth of their taxes to the rich. how's that for good economics.

i just said much of it is deflating our economy. all that stuff that's going to the chinese.
and as high as the debt is.... it's preventing consumer spending even if it's in the US that the money goes. if X spends 1000 on giving to the rich for nothing,,, that's preventing X from spending 1000, on many many products that would employ many many people and increase the bottom line. now, it's just making the rich richer,,,, making it such that the rich have more money than they know what to do with in terms of fiding something to invest in etc.

Edited September 14, 2008 by dairygirl4u2c

[dairygirl4u2c]

i think most people, incidentally on the note of bail outs etc, don't realize a fundamental problem with teh creidit issues now.

there's securitizations,,,, where investors bought into mortgages with shares. it caused the bubble we saw, and then the bubble popped. and now investors don't want to invest no more. the problem is at the local level,,,, the lenders had bad lending policies, how can you trust them?
i'm not saying whether it's a good idea or not to bail them out. but i'd bet there's exceptions to the general rule that you shouldn't bail them out.
if you can get investors to be ocnfidant etc, go for it. it's such a large problem, that if the gov can fix it, if it can, then it should.

[ardillacid]

Bob Barr '08

[T-Bone _]

[quote name='dairygirl4u2c' post='1654978' date='Sep 13 2008, 07:46 PM']it doesn't matter who it goes to. it's essentially roundabout way,,, everyone paying a fifth of their taxes to the rich. how's that for good economics.

i just said much of it is deflating our economy,,, all that stuff that's going to the chinese.
and as high as the debt is.... it's preventing consumer spending. if X spends 1000 on giving to the rich for nothing,,, that's preventing X from spending 1000, on many many products that would employ many many people and increase the bottom line. now, it's just making the rich richer,,,, making it such that the rich have more money than they know what to do with in terms of fiding something to invest in etc.[/quote]

It's the budget deficit that's deflating our economy. That's what's going to the Chinese. Not the debt. (And who gave China Most Favored Nation Status?)

[T-Bone _]

[quote name='notardillacid' post='1654992' date='Sep 13 2008, 08:01 PM']Bob Barr '08 [/quote]

Barr and Wayne Allen Root!

woot!

[dairygirl4u2c]

[quote name='dairygirl4u2c' post='1654985' date='Sep 13 2008, 08:56 PM']i think most people, incidentally on the note of bail outs etc, don't realize a fundamental problem with teh creidit issues now.

there's securitizations,,,, where investors bought into mortgages with shares. it caused the bubble we saw, and then the bubble popped. and now investors don't want to invest no more. the problem is at the local level,,,, the lenders had bad lending policies, how can you trust them?
i'm not saying whether it's a good idea or not to bail them out. but i'd bet there's exceptions to the general rule that you shouldn't bail them out.
if you can get investors to be ocnfidant etc, go for it. it's such a large problem, that if the gov can fix it, if it can, then it should.[/quote]

cause when the bubble popped... it left a lot of jobs and economic infrastructure lacking substnace.
it's like we went from the new days of securitizations, abck to the old ways. quickly. that's a major reason the economy is bad.

[dairygirl4u2c]

[quote name='T-Bone _' post='1654997' date='Sep 13 2008, 09:03 PM']It's the budget deficit that's deflating our economy. That's what's going to the Chinese. Not the debt. (And who gave China Most Favored Nation Status?)[/quote]

i'm not sure what you're saying.

the deficit turns into the debt. deficit is a yearly thing,,,, so if the chinese own the deficit, they own the debt from past deficits.

plus, that quote i quoted above,,, assuming it's true... said chinese own "debt" not "deficits".

i don't know who said china is the most favored nation. it don't matter. even if china is most favored for some things, it doesn't mean we should be handing them over our money. they're our bank, so of course they're good.
they're probably even better, rather than the indirect killing slowly of our economy by borrowing from them..... in other areas, like trade. but trade doesn't have anything ot do with our borrowing situation.

[T-Bone _]

[quote name='dairygirl4u2c' post='1655017' date='Sep 13 2008, 08:34 PM']i'm not sure what you're saying.

the deficit turns into the debt. deficit is a yearly thing,,,, so if the chinese own the deficit, they own the debt from past deficits.

plus, that quote i quoted above,,, assuming it's true... said chinese own "debt" not "deficits".

i don't know who said china is the most favored nation. it don't matter. even if china is most favored for some things, it doesn't mean we should be handing them over our money. they're our bank, so of course they're good.
they're probably even better, rather than the indirect killing slowly of our economy by borrowing from them..... in other areas, like trade. but trade doesn't have anything ot do with our borrowing situation.[/quote]

Sorry--I meant [i]Trade[/i] deficit, not budget.

[Aloysius]

the thing with China is not just a trade deficit. China has bought out much of our national debt; ie the Chinese government has lent us money, we have a debt to them. the trade deficit is different.