Alan Greenspan: Repeal the Bush Tax Cuts Completely

Former Federal Reserve chief Alan Greenspan, who considers himself a lifelong Republican libertarian, wants all the tax cuts passed in 2001 and 2003 repealed, reports The New York Times. His position is contrary to the Republican stance in the discussion on this issue, currently among the most heated in Washington, and goes even further than that of the White House, which calls for keeping tax rates steady for all but the wealthiest Americans.

The tax cuts were adopted under President George W. Bush, with Greenspan's implicit support then influential in swaying lawmakers.

"I'm in favor of tax cuts, but not with borrowed money," Greenspan told the Times on Friday in a telephone interview. "Our choices right now are not between good and better; they're between bad and worse. The problem we now face is the most extraordinary financial crisis that I have ever seen or read about."

R. Glenn Hubbard, an architect of the tax cuts, disagrees. According to the Times, the chairman of the White House Council of Economic Advisers from 2001 to 2003 says "such a large tax increase in the middle of a period of sluggish economic growth would be a very bad idea."

But while Greenspan's reputation has been tarnished, with the Fed failing to restrain the runaway subprime mortgage lending that contributed to the financial crisis, the former Fed chief is still highly respected, and his opinion will carry significant weight in Congress' upcoming debate on whether to extend the tax cuts.