"Addressing the government's own imbalances will require scrutiny of both spending and taxes," Mr. Greenspan told members of the House Budget Committee. "However, tax increases of sufficient dimension to deal with our looming fiscal problems arguably pose significant risks to economic growth and the revenue base."
The Fed chairman emphasized that his own preference was to reduce deficits by cutting spending rather than raising taxes. But he said the "overriding principle" was to reduce the deficit, making compromise essential.
My point is this: here is arguably the most influential man in government regarding our economy as a whole, and inarguably, one of the most intelligent and least partisan person in a town raft with stupidity and hackery.
Further, he's not just giving a fireside chat on interest rates. He's explaining, in no uncertain terms, that we're headed for a fall, unless we change our ways:
"When you begin to do the arithmetic of what the rising debt level implied by the deficits tells you, and you add interest costs to that ever-rising debt, at ever-higher interest rates, the system becomes fiscally destabilizing," he told lawmakers. "Unless we do something to ameliorate it in a very significant manner," he added, "we will be in a state of stagnation."
The President's response?
"The president does have a substantial deficit-reduction package," said Trent Duffy, a White House spokesman. "His budget is a continuation of that policy, and he looks forward to working with Congress in cutting that spending down. Likewise, the president agrees that the long-term budget is the issue, which is why he's trying to lead a national discussion and reform movement to save and strengthen Social Security."
As with all things Washington, the truth lies between the words. Bush's budget may indeed have a "deficit-reduction package". However, as with all politicians, it's not the budget, it's the reality. SEE Bush's Prescription Plan; Iraq spending. SEE ALSO Bush creating new bureaucratic offices at the drop of a hat. Further, Bush doesn't want to go back to "pay as you go" restrictions from the Clinton years to apply to any tax cuts, only future spending packages. Dr. Evil would nod and say: "Riiiiight."
I know Bush has his mandate and all, but that was just to keep gays out of the bonds of marital bliss. Whatever happened to the fiscal responsibility platform of the GOP? Well, at least we have a strong currency and low oil prices...