Sep 16 2008
Welker’s daily links 09/15/2008
Published by Jason Welker at 12:30 am under
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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 is a teacher at Zurich International School in Switzerland, where he teaches Advanced Placement and International Baccalaureate Economics. Jason was an international school student in Malaysia before studying economics at Seattle University then earning his Masters in Education. He calls Seattle and Northern Idaho home. In addition to maintaining an economics wiki and this blog for economics student and educators, Jason also gives presentations on using Web 2.0 tools in education at workshops and conferences around the world. His economics wiki won the 2007 "Best Educational Wiki" award from the "EduBlog Awards". 
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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.
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.
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.
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