Et tu Alan (More Garbage from Greenspan)
I have tried to stay away from the term “garbage” in reference to Dr. Greenspan but today’s (Ides of March) Senate hackery went way too far:
At present, the Social Security trustees estimate the unfunded liability over the indefinite future to be $10.4 trillion. The shortfall in Medicare is calculated at several multiples of the one in Social Security. These numbers suggest that either very large tax increases will be required to meet the shortfalls or benefits will have to be pared back.
The topic was Social Security and Greenspan kept referring to payroll taxes. It would not take a large increase in payroll taxes to address the Social Security issue. But yes, Medicare expenses will go up – thanks to George Bush’s unfunded and expensive gift to Big Pharma. Now most of us might say we could raise other forms of taxes, but Greenspan has an answer to this:
Closing the gap solely with rising tax rates would be problematic; higher tax rates rarely achieve a comparable rise in tax receipts, and the level of required taxation could in itself severely inhibit economic growth.
Of course, he has fallen to the level of the Club for Growth with assertions sine reasoning or evidence. He may have done some great service in the past as FED chairman, but he is truly being a hack and a discredit to the economic profession with this kind of partisan testimony.