Greenspan supports raising taxes

The tax debate is raging on Capital Hill, and now we have this surprise from Alan Greenspan.

Former Federal Reserve chief Alan Greenspan, reversing a long-standing aversion to higher taxes, said Wednesday tax rates must rise and the fiscal stimulus wound down in order to reduce the U.S. budget deficit and allow private investment to expand.

“I am in favor for the first time in my memory of raising taxes,” Greenspan told an audience at the Council on Foreign Relations in New York. He said the economy could not recover while the high deficit remains high.

Greenspan warned that the deficit, swollen by massive stimulus spending, was crowding out capital investment. We “must find a way to simmer down fiscal activism and allow the economy to heal,” he said, adding that stimulus spending had been far less successful than anticipated.

Conservatives won’t be happy to hear this, but the reality of the long-term deficit needs serious solutions. Greenspan is stating the obvious.

  

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