On Bloomberg Television this weekend, former Federal Reserve Chairman Alan Greenspan told host Al Hunt that the country can’t afford John McCain’s massive $3.3 trillion tax cuts without corresponding spending reductions:
HUNT: John McCain’s proposed $3.3 trillion of tax cuts in two terms. Can the nation afford tax cuts of that magnitude?
GREENSPAN: Unless we cut spending, no. … I’m not in favor of financing tax cuts with borrowed money.
After endorsing Bush’s massive tax cuts for the wealthy which turned Clinton-era record surpluses into record deficits, Greenspan has much to atone for. Telling the truth about McCain’s agenda is a good start.
As the Wonk Room has noted, McCain’s tax cuts would produce the highest federal deficit in 25 years. After inheriting Bush’s $407 billion deficit, yearly deficits under McCain would increase sharply, beginning with at least $505 billion in FY2009.
McCain has not specified how he would pay for his tax cuts, though he claims he will balance the budget in his first term. Recognizing that McCain’s math doesn’t add up, McCain’s top economic adviser Douglas Holtz-Eakin has said, “I would like the next president not to talk about deficit reduction.”