At the end of this year, President Obama wants to allow Bush-era tax cuts to expire. In this week’s syndicated column, I talk about Obama’s bizarre supporter: Alan Greenspan. Once a disciple of Ayn Rand, Greenspan now supports tax hikes:
Greenspan, going beyond what even President Obama favors, calls on Congress to let the 2001 and 2003 Bush tax cuts expire — not just for upper-income people but for everyone. "I'm in favor of tax cuts, but not with borrowed money. Our choices right now are not between good and better; they're between bad and worse. The problem we now face is the most extraordinary financial crisis that I have ever seen or read about," he told the Times.
Given the stagnant economy, this is the worst possible time for tax increases. (Is there ever a good time?) Taking money out of the economy will stifle investment and recovery, and it's unlikely to raise substantial revenue, even if that were a good thing.
Finally, the stupidest thing said about tax cuts is the often-repeated claim that "they ought to be paid for." How absurd! Tax cuts merely let people keep money they rightfully own. It's government programs, not tax cuts, that must be paid for. The tax-hungry politicians' demand that cuts be "paid for" implies the federal budget isn't $3 trillion, but $15 trillion — the whole GDP — with anything mercifully left in our pockets being some form of government spending. How monstrous!
If cutting taxes leaves less money for government programs, the answer is simple: Ax the programs!
Full column here.