Alan Greenspan says we can’t afford McCain’s cuts without a commensurate reduction in spending.
Alan Greenspan says the country can’t afford tax cuts of the magnitude proposed by Republican presidential contender John McCain — at least not without a corresponding reduction in government spending.”Unless we cut spending, no,” the former Federal Reserve chairman said Friday when asked 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.”McCain has said that he would offset his proposed cuts — including reducing the corporate tax rate and eliminating the Alternative Minimum Tax that has plagued middle-class families — by ending congressional pork-barrel spending, unnecessary government programs and overhauling entitlement programs such as Medicare and Social Security.
First, let me say that I outright reject the notion that we have to “pay” for tax cuts with dollar-for-dollar spending reductions. Cutting taxes has always resulted in increased revenue and always will.
That being said, it is a budgeting reality that when you decrease revenues on one side, you’ve got to cover that loss on the other side. The increased revenues will not be made a reality on the very day that you cut the taxes, and you have to pay the bills somehow. Being able to offset tax cuts with spending reductions is also much more politically viable. No one wants to pass an irresponsible budget and feel that they’re enacting a spending plan that just doesn’t work.
McCain has always been a fiscal hawk, and here is his moment to shine. He should take up the challenge and lay out a spending plan that works, including any necessary reductions to cover his tax cuts. Show the left that there is more than enough waste in the federal budget to trim some fat here and there AND give the people a much-needed break on their taxes. McCain should come out swinging not only on taxes, but on government spending, as well. This is a strong point for him, and he should be exploiting it.