Sep 16 2008
Welker’s daily links 09/15/2008
Published by Jason Welker at 12:30 am under Daily Links
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Bloomberg.com:Greenspan Says McCain Tax Plan Needs Corresponding Budget Cuts
“Former Federal Reserve Chairman Alan Greenspan said the country can’t afford $3.3 trillion of tax cuts proposed by Republican presidential nominee John McCain without corresponding spending reductions.
Greenspan, a lifelong Republican and longtime friend of McCain, said today on Bloomberg Television’s “Political Capital With Al Hunt” that “I’m not in favor of financing tax cuts with borrowed money.”
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. Democratic nominee Barack Obama is proposing fewer tax cuts and more ambitious spending programs.
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.
Greenspan has said there’s at least a 50 percent chance the U.S. economy will slide into a recession.”
About the author: Jason Welker teaches International Baccalaureate and Advanced Placement Economics at Zurich International School in Switzerland. In addition to publishing various online resources for economics students and teachers, Jason developed the online version of the Economics course for the IB and is has authored two Economics textbooks: Pearson Baccalaureate’s Economics for the IB Diploma and REA’s AP Macroeconomics Crash Course.
Jason is a native of the Pacific Northwest of the United States, and is a passionate adventurer, who considers himself a skier / mountain biker who teaches Economics in his free time. He and his wife keep a ski chalet in the mountains of Northern Idaho, which now that they live in the Swiss Alps gets far too little use. Read more posts by this authorRelated posts:
With McCains idea of greater tax cuts wouldn't that keep more money cirrculating in the economy? Would McCains plan include another government stimulous plan, such as gthe one given to the public in the Bush administration? Most of the money that was given ot the public in said bill was from foreign investment, and due to America's lack of firms that are located with in the united states, and fully employee american citizens, most of the money that was to boost the economy went to foreign economies, such as China who inevitably gave the US the money in the first place. Wouldn't it be more sensible to build ineriorly in America nad try to draw firms back to the US, so that the employment rate increases and money spent doesn't travel half way around the world.
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I think that tax cuts would be greatly beneficial to the American population because when they are paying less tax they have more money which will eventually end up being spent back into the economy, therefore McCain will still receive tax through VAT. This would also help the economy in that there would then be more in the economy in the first place.
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Interestingly enough, last year McCain said that he was reading Greenspan's Memoir, "The Age of Turbulence." to educate himself in Economics, an area that he admits he is weaker in then foreign relations. The Democrats should have a field day with this one. Lets see if he heeds Greenspan's warnings and chooses to rework his tax agenda.
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I think that the economy should be left alone and be allowed to enter a ressesion as it is part of the natural cycle. Once it has settled it will recover, so i dont see any need to deficit spend. I dont think tax cuts will do much, i belive its just a tool to get people to vote for him instead of stimulating the economy. Most people will probably save the money they gain from the tax cuts, meaning it wont really stimulate growth again.
P.s US deserves to have a ressesion it has caused 1 in the UK
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